Answered step by step
Verified Expert Solution
Question
1 Approved Answer
14-5 B Prepare journal entries to record the issuance of the 10% bonds and the retirement of the 8% bonds. (b) Indicate the income statement
14-5 B
Prepare journal entries to record the issuance of the 10% bonds and the retirement of the 8% bonds. (b) Indicate the income statement treatment of the gain or loss from retirement and the note disclosure required. In each of the following independent cases the company closes its books on December 31. Lime Co. sells $600, 000 of 9% bonds on April 1, 2014. The bonds pay interest on October 1 and April 1. The due date of the bonds is October 1, 2018. The bonds yield 8%. Give entries through December 31, 2015. Lemon Co. sells $1, 000, 000 of 10% bonds on August 1, 2014. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2017. The bonds yield 12%. On October 1, 2015, Titania buys back $200, 000 worth of bonds for $218, 000 (includes accrued interest). Give entries through February 1, 2016. (Round to the nearest dollar.) For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective-interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.) Presented below are selected transactions on the books of Beacher Corporation. Bonds payable with a par value of $600, 000, which are dated January 1, 2014, are sold at 98 plus accrued interest. They are coupon bonds, bear interest at 8% (payable annually at January 1), and mature January 1, 2024. (Use interest expense account for accrued interest.) Adjusting entries are made to record the accrued interest on the bonds, and the amortizationStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started