Question
4. (L.O. 3, 4 and 5) The following transactions are taken from the records of the Elton Corporation. Prepare journal entries for the transactions for
4. (L.O. 3, 4 and 5) The following transactions are taken from the records of the Elton Corporation. Prepare journal entries for the transactions for the following:
a. Bonds payable with a par value of $800,000, carrying a stated interest rate of 9% payable semiannually on March 1 and September 1, were issued on June 1, 2014, at 102.5 plus accrued interest. The bonds are dated March 1, 2014 and mature on March 1, 2024.
b. September 1 interest payment is made. (Bond premium amortization is recorded only at year end.)
c. Year-end (December 31) accrued interest on bonds payable is recorded and the bond premium is amortized using the straight-line method.
d. March 1 interest payment is made.
e. Bonds with a par value of $350,000 are purchased at 101 plus accrued interest on August 1, 2015, and retired. (Bond premium amortization is recorded only at year end.)
f. September 1 interest payment is made.
g. Year-end (December 31) accrued interest on bonds payable is recorded and the bond premium is amortized using the straight-line method.
Instructions: Prepare journal entries for the transactions noted above.
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