Question
I NEED HELP WITH C Swifty Corporation issued $836,000, 15%, 10-year bonds on December 31, 2018, for $817,190. Interest is payable annually on December 31.
I NEED HELP WITH C
Swifty Corporation issued $836,000, 15%, 10-year bonds on December 31, 2018, for $817,190. Interest is payable annually on December 31. Swifty Corporation uses the straight-line method to amortize bond premium or discount.
A) Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31, 2018 | Cash | 817,190 | |
Discount on Bonds Payable | 18,810 | ||
Bonds Payable | 836,000 |
B) Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit |
Dec. 31, 2019 | Interest Expense | 127,281 | |
Discount on Bonds Payable | 1,881 | ||
Cash | 125,400 |
C) Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date | Account Titles and Explanation | Debit | Credit | ||||
Dec. 31, 2028 | |||||||
Step 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