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Practice Problem 01 a-f (Part Level Submission) On May 1, 2020, Tamarisk, Inc. issued $645,000, 12%,...

Practice Problem 01 a-f (Part Level Submission)

On May 1, 2020, Tamarisk, Inc. issued $645,000, 12%, 5-year bonds at face value. The bonds were dated May 1, 2020, and pay interest annually on May 1. Financial statements are prepared annually on December 31.

f)Assume that on January 1, 2022, Tamarisk pays the accrued bond interest and calls the bonds at 105. Record the payment of interest and redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

Jan. 1, 2022
(To record payment of interest)

Jan. 1, 2022
(To record redemption of bonds)

Thanks you,

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Homework Answers

Answer #1
Date Account titles and explanation Debit Credit
Jan 1, 2022 Interest payable $51600
Cash $51600
(To record payment of interest)
Jan 1, 2022 Bonds payable $645000
Loss on bonds redemption (677250-645000) $32250
Cash (645000*105/100) $677250
(To record redemption of bonds)

Calculation of Interest

From May 1- Dec 31= 8 months

Interest= $645000*12%*8/12= $51600

NOTE:- Please rate the answer and for any problem regarding the answer please ask in the comment section.

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