ACCT 23020 Lecture Notes - Lecture 40: Interest Expense, Regional Policy Of The European Union, Southwest Airlines
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On the first day of the fiscal year, a company issues a$800,000, 6%, 5 year bond that pays semi-annual interest of $24,000($800,000 x 6% x 1/2), receiving cash of $690,960. Journalize theentry to record the first interest payment and the amortization ofthe related bond discount using the straight-line method.
If an amount box does not require an entry, leave it blank, orenter zero "0".
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Please show the work.
Presented below are selected transactions on the books ofSimonson Corporation.
May 1, 2014 | Bonds payable with a par value of $934,800, which are datedJanuary 1, 2014, are sold at 105 plus accrued interest. They arecoupon bonds, bear interest at 11% (payable annually at January 1),and mature January 1, 2024. (Use interest expense account foraccrued interest.) | |
Dec. 31 | Adjusting entries are made to record the accrued interest onthe bonds, and the amortization of the proper amount of premium.(Use straight-line amortization.) | |
Jan. 1, 2015 | Interest on the bonds is paid. | |
April 1 | Bonds with par value of $365,500 are called at 102 plus accruedinterest, and redeemed. (Bond premium is to be amortized only atthe end of each year.) | |
Dec. 31 | Adjusting entries are made to record the accrued interest onthe bonds, and the proper amount of premium amortized. |
Prepare journal entries for the transactions above.