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30 Mar 2018

Problem 15-1A
On May 1, 2012, Chance Corp. issued $427,800, 9%, 5-year bondsat face value. The bonds were dated May 1, 2012, and pay interestsemiannually on May 1 and November 1. Financial statements areprepared annually on December 31.

(a) Prepare the journal entry to record the issuance of the bonds.(Credit account titles areautomatically indented when amount is entered. Do not indentmanually.)
(b) Prepare the adjusting entry to record the accrual ofinterest on December 31, 2012. (Credit account titles are automaticallyindented when amount is entered. Do not indentmanually.)
(c) Show the balance sheet presentation on December 31, 2012.(For Bonds Payable, Notes Payable andMortgage payable enter the account name only and do not provide anyadditional descriptive information e.g. due 2017.)
(d) Prepare the journal entry to record payment of interest onMay 1, 2013, assuming no accrual of interest from January 1, 2013,to May 1, 2013. (Credit accounttitles are automatically indented when amount is entered. Do notindent manually.)
(e) Prepare the journal entry to record payment of interest onNovember 1, 2013. (Credit accounttitles are automatically indented when amount is entered. Do notindent manually.)
(f) Assume that on November 1, 2013, Chance calls the bonds at104. Record the redemption of the bonds. (Credit account titles are automaticallyindented when amount is entered. Do not indentmanually.)

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Trinidad Tremblay
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1 Apr 2018

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On January 1, 2017, Bridgeport Company purchased 9% bonds havinga maturity value of $330,000, for $357,062.64. The bonds providethe bondholders with a 7% yield. They are dated January 1, 2017,and mature January 1, 2022, with interest receivable January 1 ofeach year. Bridgeport Company uses the effective-interest method toallocate unamortized discount or premium. The bonds are classifiedin the held-to-maturity category.

a)Prepare the journal entry at the date of the bond purchase.(Enter answers to 2 decimal places, e.g.2,525.25. Credit account titles areautomatically indented when amount is entered. Do not indentmanually. If no entry is required, select "No Entry" for theaccount titles and enter 0 for the amounts.)

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