Question
Flint Ltd. sold $6,460,000 of 12% bonds, which were dated March 1, 2020, on June 1, 2020. The bonds paid interest on September 1 and
Flint Ltd. sold $6,460,000 of 12% bonds, which were dated March 1, 2020, on June 1, 2020. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2030, and the bonds were issued to yield 14%. Flint's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2021, Flint bought back $2,460,000 worth of bonds for $2,360,000 plus accrued interest.
SHOW ALL CALCULATIONS!!!
Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. (Hint: Use the account Interest Expense in your entry).
Account Titles and Explanation | Debit | Credit |
Prepare the journal entry for the scheduled interest payment on September 1, 2020.
Date |
| Debit | Credit | |
Prepare any year-end entry required at February 28, 2021. (Round answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date |
| Debit | Credit | |
Prepare the entry required for the redemption of face value $2,460,000 of the bonds on June 1, 2021. (Round answer to 0 decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Date |
| Debit | Credit | |
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