Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1, 2010.The bonds were dated July 1, 2010,
Question:
Elkins Company sold $2,500,000, 8%, 10-year bonds on July 1, 2010.The bonds were dated July 1, 2010, and pay interest July 1 and January 1. Elkins Company uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.
Instructions
(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2010, assuming that the bonds sold at 104.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 98.
(c) Show balance sheet presentation for each bond issue at December 31, 2010.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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a 2010 July 1 Cash 2500000 X 104 2600000 Premium on Bonds Payable 10000...View the full answer
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Related Book For 
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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