Question
MARIGOLD SA Statement of Financial Positiion (partial) December 31, 2013 Non-current liabilities Bonds payable (face value 3,016,000), 8% due January 1, 2028 Current liabilities 3,171,300
MARIGOLD SA Statement of Financial Positiion (partial) December 31, 2013 Non-current liabilities Bonds payable (face value 3,016,000), 8% due January 1, 2028 Current liabilities 3,171,300 Interest payable (for 12 months from January 1 to December 31) 241,280 Interest is payable annually on January 1. The bonds are callable on any annual interest date. Marigold uses straight-line amortization for any bond premium or discount. From December 31, 2017, the bonds will be outstanding for an additional 10 years (120 months). Assume the country allows the use of straight line amortization for bond premiums and discounts. (a) Journalize the payment of bond interest on January 1, 2018. (b) Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2018. (c) Assume that on January 1, 2019, after paying interest, Marigold calls bonds having a face value of 1,206,400. The call price is 105. Record the redemption of the bonds. (d) Prepare the adjusting entry at December 31, 2019, to amortize bond premium and to accrue interest on the remaining bonds. No. Date Account Titles and Explanation 2018 (a) Jan. 1 (b) Dec. 31 2019 (c) Jan. 1 (d) Dec. 31 Debit Credit
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