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10-9a to 10-11a issuance of bonds, interest ere dated January 1 and pay interest annually on January 1. Paris Electric uses the accrual, and straight-ime
10-9a to 10-11a
issuance of bonds, interest ere dated January 1 and pay interest annually on January 1. Paris Electric uses the accrual, and straight-ime entries to record *P10-9A Paris Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2019, The bon straight-line method to amortize bond premium or discount. The bonds were sold at 104 ears Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2019 (b) Prepare a bond premium amortization schedule for the first 4 interest periods. (c) Prepare the journal entries for interest and the amortization of the premium in 2019 (b) Amortization $12,000 and 2020 (d) Premium on bonds payable $96,000 Prepare entries to record (d) Show the balance sheet presentation of the bond liability at December 31, 2020. *P10-10A Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 1, 2019 issuance of bonds, interest, and The bonds were dated January 1, 2019, and pay interest annually on January 1. Saberhagen straight-Jine amortization of bond premium and discouns. Company uses the straight-line method to amortize bond premium or discount. Instructions (a) Prepare all the necessary journal entries to record the issuance of the bonds and bond (a) Amortization $14,000 (b) Amortization $7,000 interest expense for 2019, 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 the bonds at December 31, 2019, for both the (c) Premium on bonds payable $126,000 Discount on bonds requirements in (a) and (b). payable $63,000 to record P10-11A The following is taken from the Colaw Company balance sheet. interest payments, straight COLAW COMPANY Balance Sheet (partial) December 31, 2019 e premium amortization and redemption of bonds. Current liabilities Interest payable (for 12 months from January 1 to December 31) 210,000 Long-term liabilities Bonds payable, 7% due January 1, 2030 Add: Premium on bonds payable $3,000,000 200,000 3,200,000 Interest is payable annually on January 1. The bonds are callable on any annual interes date. Colaw uses straight-line amortization for any bond premium or discount. From December 31, 2019, the bonds will be outstanding for an additional 10 years (120 months). Instructions (a) Journalize the payment of bond interest on January 1, 2020 (b) Amortization $20,000 ) Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2020 ing a face value of $1,200,000. The call price is 101. Record the redemption of the bonds. accrue interest on the remaining bond (c) Gain $60,000 (c) Assume that on January 1, 2021, after paying interest, Colaw Company calls bonds ha (d) Prepare the adjusting entry at December 31, 2021, to amortize bond premium and to s. Amortization $12,000Step by Step Solution
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