Question

January 1, 2014, issued $400,000 of 7.5%, 10-year bonds were issued at 97. - Issuance of...

January 1, 2014, issued $400,000 of 7.5%, 10-year bonds were issued at 97.

- Issuance of 7.5% bonds on Jan 1 2014

- Accrual of bond interest and recognition of amortization on December 31 2014.

Instructions: Prepare journal entries for above and entries to show the early retirement on January 1, 2016 at 102. Bond discount had a $9,600 balance on January 1, 2016.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Date Account titles & Explanations Debit Credit
1/1/2014 Cash (400,000*.97) 388000
discount on bonds 12000
Bonds paybale 400,000
12/31/2014 interest expense 31200
discount on bonds (12000/10) 1200
cash (400,000*7.5%) 30000
1/1/2016 bonds payable 400,000
loss on redemption 17,600
discount on bonds 9,600
Cash (400,000*1.02) 408000
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
5) Larsen Corporation issued a $ 400,000, 5.5%, 10-year bonds payable at 101 on January 1,...
5) Larsen Corporation issued a $ 400,000, 5.5%, 10-year bonds payable at 101 on January 1, 2007. The bonds are retired on 1/1/2017. Prepare the journal entries on the date issuance and at the date of retirement.
Sheridan Company issued $501,000, 8%, 30-year bonds on January 1, 2022, at 102. Interest is payable...
Sheridan Company issued $501,000, 8%, 30-year bonds on January 1, 2022, at 102. Interest is payable annually on January 1. Sheridan uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2022. (c) The payment of interest on January 1, 2023....
Presto Company issued $240,000, 9%, 20-year bonds on January 1, 2012, at 103. Interest is payable...
Presto Company issued $240,000, 9%, 20-year bonds on January 1, 2012, at 103. Interest is payable semiannually on July 1 and January 1. Presto uses straight-line amortization for bond premium or discount. Interest is not accrued on June 30. Instructions: Prepare the journal entries to record the following. a. The issuance of the bonds. b. The payment of interest and the premium amortization on July 1, 2012. c. The accrual of interest and the premium amortization on December 31, 2012....
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable...
Capital Company issued $600,000, 10%, 20-year bonds on January 1, 2014, at 103. Interest is payable semiannually on July 1 and January 1. Capital uses the straight-line method of amortization and has a calendar year end. Instructions Prepare all (3) journal entries made in 2014 related to the bond issue. PLEASE show the journal entry for payment of interest
On January 1, a corporation issued $210,000 in bonds at face value. The bonds have a...
On January 1, a corporation issued $210,000 in bonds at face value. The bonds have a stated interest rate of 7 percent. The bonds mature in 10 years and pay interest once per year on December 31. Required: 1, 2 & 3. Prepare the required journal entries to record the bond issuance, interest payment on December 31, early retirement of the bonds. Assume the bonds were retired immediately after the first interest payment at a quoted price of 102. (If...
On January 1, 2019, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were...
On January 1, 2019, Timber Corporation issued $800,000, 6%, 5-year bonds for $735,110. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid annually on January 1. The company uses the effective-interest method of amortization. Instructions: (a) Prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round to the nearest dollar). (b) Prepare the journal entries that Timber Corporation would make on January 1 and December...
Culver Company issued $396,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is...
Culver Company issued $396,000 of 10%, 20-year bonds on January 1, 2017, at 102. Interest is payable semiannually on July 1 and January 1. Culver Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account...
On January 1, 2021, Southerly Winds Inc. issued $350,000, 15-year, 5% bonds at 102. The issuance...
On January 1, 2021, Southerly Winds Inc. issued $350,000, 15-year, 5% bonds at 102. The issuance cost from the broker was $25,500 and the net proceeds were paid to Southerly Winds Inc. in cash. The bonds require interest payments annually every December 31. Southerly Winds Inc. follows ASPE and amortizes the bond discount or premium using the straight-line method (ie: uses the amortized cost method of valuation). Required: Prepare the entries for: a). The bond issuance b). The first interest...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted...
Lorance Corporation issued $845,000, 9%, 10-year bonds on January 1, 2015, for $792,347. This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Lorance uses the effective-interest method to amortize bond premium or discount. 1)Prepare the journal entry to record the issuance of the bonds. 2)Prepare the journal entry to record the payment of interest and the discount amortization on July 1, 2015, assuming that interest was not...
Teal Company issued $ 576,000 of  10%,  20-year bonds on January 1, 2017, at  102. Interest is payable semiannually...
Teal Company issued $ 576,000 of  10%,  20-year bonds on January 1, 2017, at  102. Interest is payable semiannually on July 1 and January 1. Teal Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of  9.7705%. Prepare the journal entries to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT