The following section is taken from Barnaby Corp.'s balance sheet at December 31, 2006. Current liabilities Bond
Question:
The following section is taken from Barnaby Corp.'s balance sheet at December 31, 2006.
Current liabilities Bond interest payable $ 128,000 Long-term liabilities Bonds payable, 8%, due January 1, 2011 1,600,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date.
Instructions
(a) Journalize the payment of the bond interest on January 1, 2007.
(b) Assume that on January 1, 2007, after paying interest, Barnaby Corp. calls bonds having a face value of $400,000. The call price is 105. Record the redemption of the bonds.
(c) Prepare the adjusting entry on December 31, 2007, to accrue the interest on the remaining bonds.
Problems: Set B 521
(c) Tot. current liabilities $118,622 Journalize and post note transactions; show balance sheet presentation.
(sOi2, 7)
(b) Interest Payable $680 Prepare journal entries to record interest payments and redemption of bonds.
(SO'G, 6)
(b) Loss $20,000 522 CHAPTER 10 Prepare journal entries to record issuance of bonds, interest, balance sheet presentation, and bond redemption.
(SO 5, 6, 7)
(f) Loss 16,000 Prepare journal entries to record issuance of bonds, show balance sheet presentation, and record bond redemption.
(SO 5, 6, 7)
(c) Loss $39,000 Calculate and comment on ratios.
(SO 7)
Ca===C Reporting and Analyzing Liabilities
Step by Step Answer:
Financial Accounting Tools For Business Decision Making
ISBN: 9780471730514
4th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso