Question
Cupola Fan Corporation issued 12%, $590,000, 10-year bonds for $556,000 on June 30, 2024. Debt issue costs were $3,400. Interest is paid semiannually on
Cupola Fan Corporation issued 12%, $590,000, 10-year bonds for $556,000 on June 30, 2024. Debt issue costs were $3,400. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2025), the corporation exercised its call privilege and retired the bonds for $566,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs. Required: 1. to 4. Prepare the journal entries to record the issuance of the bonds, the payment of interest and amortization of debt issue costs on December 31, 2024 and June 30, 2025 and call of the bonds according to International Financial Reporting Standards. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. No Date 1 June 30, 2024 Cash Discount on bonds payable Answer is not complete. General Journal Debit Credit 552,600 34,000 590,000 Bonds payable 2 December 31, 202 Interest expense Discount on bonds payable Cash 100 39,140 x 3,740 35,400 3 June 30, 2025 Interest expense 37,270 Cash 35,400 Discount on bonds payable 1,870 4 July 01, 2025 Interest expense 590,000 Discount on bonds payable 25,000 Cash 565,000
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