Dillon Corp. authorized $100,000 of 6% (cash payable each December 31), 10-year bonds on January 1...
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Dillon Corp. authorized $100,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98 Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $50,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year 1 Account Name Dr. Cr. 0 0 0 0 0 0 To record the issuance of bonds b. Jan. 1, Year 6 0 0 0 0 To record the issuance of bands. C. Jan. 1, Year 6 0 0 0 0 0 0 0 0 To record the redemption of bonds. Dillon Corp. authorized $100,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98 Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $50,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year 1 Account Name Dr. Cr. 0 0 0 0 0 0 To record the issuance of bonds b. Jan. 1, Year 6 0 0 0 0 To record the issuance of bands. C. Jan. 1, Year 6 0 0 0 0 0 0 0 0 To record the redemption of bonds.
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Related Book For
Financial accounting
ISBN: 978-1118285909
IFRS Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel
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