Journal entries

Exercise 10.8 (Algo) Bond Interest on Bonds Issued at Face Value (LO10-5) On March 31,2021 , Gardner Corporation received authorization to issue $50,000 of 9 percent, 30 -year bonds payable. The bonds pay interest on March 31 and September 30 . The entire issue was dated March 31,2021 , but the bonds were not issued until April 30, 2021. They were issued at face value. a. Prepare the journal entry at April 30,2021 , to record the sale of the bonds. b. Prepare the journal entry at September 30,2021 , to record the semiannual bond interest payment. c. Prepare the adjusting entry at December 31,2021 , to record bond interest expense accrued since September 30,2021. (Assume that no monthly adjusting entries to accrue interest expense had been made prior to December 31,2021 ) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Xonic Corporation issued $8.4 million of 20-year, 8 percent bonds on April 1, 2021, at 102, Interest is paid on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2041. Xonic's fiscal year ends on December 31. Prepare the following journal entries. a. April 1, 2021, to record the issuance of the bonds. b. September 30,2021 , to pay interest and to amortize the bond premium. c. March 31, 2041, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries). Assume an adjusting entry was made on December 31, 2040, to recognize interest from October 1 to December 31. d. What is the effect of amortizing the bond premium on (1) annual net income and (2) annual net cash flow from operating activities. (lgnore possible income tax effects.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) Complete this question by entering your answers in the tabs below. a. April 1, 2021, to record the issuance of the bonds. b. September 30, 2021, to pay interest and to amortize the bond premium. c. March 31, 2041, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries). As an adjusting entry was made on December 31, 2040, to recognize interest from October 1 to December 31 . Journal entry worksheet Mellilo Corporation issued $4.1 million of 20 -year, 9.5 percent bonds on July 1,2021 , at 98 . Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30,2041 . Mellilo's fiscal year ends on December 31. Prepare the following journal entries. a. July 1, 2021, to record the issuance of the bonds. b. December 31,2021 , to pay interest and amortize the bond discount. c. June 30,2041 , to pay interest, amortize the bond discount, and retire the bonds at maturity (make two separate entries). d. What is the effect of amortizing the bond discount upon (1) annual net income and (2) annual net cash flow from operating activities. (Ignore possible income tax effects.) (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in dollars not in millions.) Complete this question by entering your answers in the tabs below. a. July 1,2021 , to record the issuance of the bonds. b. December 31,2021 , to pay interest and amortize the bond discount. c. June 30, 2041, to pay interest, amortize the bond discount, and retire the bonds at maturity (make two separate entries): Journal entry worksheet