Chapter 15 handout On January 1, 2019, ABC Corporation sold (issued) $200,000 of its ten-year, 6% bonds payable at 96. Interest is paid each January 1. Record the journal entry for the sale of the bonds. Date Description Debit Credit Record the journal entry for the accrual of interest on December 31. Assume straight-line amortization Date Description Debit Credit Record the journal entry for the first payment of interest. Date Description Debit Credit Johnson Company issued $1,500,000, 10-year, 6% bond issue dated January 1, 2019, with semi- annual interest to be paid each July 1 and January 1. The bonds were issued (sold) for $1,700,000. Record the journal entry for the sale of the bonds. Date Description Debit Credit Record the journal entry for the accrual of interest on June 30. Assume straight-line amortization. Date Description Debit Credit Record the journal entry for the first payment of interest. Date Description Debit Credit Chapter 15 handout The Boiling Springs HS, 8% bonds of $100,000 issued on Jan. 1. 2019, are recalled at 104 on Dec. 31, 2021. The balance in the discount account at the time of the recall is $3,500. Record the journal entry for the recall of the bond. Date Credit Description Debit The Boiling Springs HS, 8% bonds of $100,000 issued on Jan. 1, 2019, are recalled at 105 on Dec. 31, 2021. The balance in the premium account at the time of the recall is $2,500. Record the journal entry for the recall of the bond. Date Description Debit Credit The ABC Corporation, 10% bonds of $100,000 issued on Jan. 1, 2019, are converted into 10,000 shares of common stock on Dec. 31, 2021. The stock has a par value of $5 and a market value of $38 at the time of the conversion. The balance in the premium account at the time of the recall is $2,900. Record the journal entry for the conversion of the bond. Date Description Debit Credit The XYZ Corporation, 10% bonds of $100,000 issued on Jan. 1. 2019, are converted into 30,000 shares of common stock on Dec. 31, 2021. The stock has a par value of $2 and a market value of $38 at the time of the conversion. The balance in the discount account at the time of the recall is $1,700. Record the journal entry for the conversion of the bond. Date Description Debit Credit Chapter 15 handout Smith Co. purchased a new office building by signing a $500,000,7%, mortgage note payable on January 1, 2019. The terms provide for semiannual installment payments of $50,000 on June 30 and December 31. Prepare the journal entry to record the purchase of the building. Prepare the journal entry for the first payment. Date Description Debit Credit Prepare the journal entry for the second payment. Date Description Debit Credit On January 1, 2019, Wesson Corporation signed a 5-year noncancelable lease for an office building. The lease requires 10 annual payments of $60,000. This lease qualifies as a capital lease. Prepare the journal entry to record this lease, assuming an interest rate of 8%. The present value of the minimum lease payments is $402,605. Date Description Debit Credit Prepare the journal entry for the first lease payment on December 31, 2019. Date Description Debit Credit Prepare the journal entry for the second lease payment on December 31, 2020. Date Description Debit Credit