1. Kershaw Electric Ltd. Sold $6,000,000 10%, 15-year bonds on January 1, 2020. The bonds were dated January 1, 2020 and paid interest on January 1. The bonds were sold at 98.

a. Prepared Journal entry to record the issuance of the bonds on January 1, 2020.

b. On January 1, 2022 when the carrying value of the bonds was $ 5,896,000, the company redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period was already paid

2. On January 1, 2020, Belgium Industries had the following equity accounts.

Share capital - ordinary ($4 Par Value, 250,000 shares issued and outstanding) $1,000,000

Share Premium - Ordinary 200,000 Retained Earnings 840,000

During the year, the following transactions occurred.

Jan 15 Declared a $1 cash dividend per share to shareholders of record on January 31, payable at February 15.

Feb 15 Paid the dividend declared in January

Apr 15 Declared a 10% share dividend to shareholders of record on the April 30, distributable May 15. On April 15, the market price was $11 per share.

May 15 Issued the shares for the share dividend

July 1 Announced a 2 for 1 share split. The market price per share prior to the announcement was $12 (The new par value is $2)

Dec 1 Declared a $0.50 per share cash dividend to shareholders of record on December 15 payable January 10, 2021

. 31 Determined that net income for the year was $264,000.

Instructions

1. Journalize the transactions and the closing entries for net income and dividend

2. Prepare equity section at December 31.