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Lunas Feather Pillows, Inc. is owned by Luna the Cat. As everyone who has a cat knows, they own what is in their space. Luna
Lunas Feather Pillows, Inc. is owned by Luna the Cat. As everyone who has a cat knows, they own what is in their space. Luna the Cat personally selects the feathers for each pillow when she is in the mood to do some work. Otherwise, she hangs out at the milk bar.
All transactions in this packet relate to Lunas Feather Pillows, Inc. The fiscal year is a calendar year.
- On January 1, 2020, Lunas Feather Pillows, Inc borrowed $100,000 at 6%. The loan is due December 31, 2020. Record, in good form, all the journal entries related to this borrowing.
- On January 1, 2020, Luna borrowed $250,000 at 8% by issuing a note. The note matures on December 31, 2021. Record, in good form, all the journal entries related to this borrowing.
- On January 1, 2021, Lunas Feather Pillows, Inc. issued 8% bonds dated January 1, with a face amount of $800,000. The bonds mature on December 31, 2024 (4 years) and pay interest annually. The market yield for bonds of similar risk and maturity was 8% when the bonds were issued. Prepare, in good form, all the journal entries and amortization schedule for the bonds.
- On January 1, 2021, Lunas Feather Pillows, Inc. issued 8% bonds dated January 1, with a face amount of $800,000. The bonds mature on December 31, 2025 (5 years) and pay interest annually. The market yield for bonds of similar risk and maturity was 12% when the bonds were issued. Prepare, in good form, all the journal entries and amortization schedule for the bonds.
- On January 1, 2021, Lunas Feather Pillows, Inc. issued 8% bonds dated January 1, with a face amount of $800,000. The bonds mature on December 31, 2025 (5 years) and pay interest semi-annually. The market yield for bonds of similar risk and maturity was 6% when the bonds were issued. Prepare, in good form, all the journal entries and amortization schedule for the bonds.
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