Question
Okano Medical Lab issued $300,000 in bonds at face value 10 years ago and has paid semiannual interest payments through the years. (a) Assume the
Okano Medical Lab issued $300,000 in bonds at face value 10 years ago and has paid semiannual interest payments through the years.
(a) | Assume the bonds are redeemed at face value. |
(b) | Assume that $25,000 of the bonds are redeemed at 103. |
(c) | Assume that $25,000 of the bonds are redeemed at 97. |
Required:
Prepare the journal entries to record (a), (b), and (c). |
CHART OF ACCOUNTSOkano Medical LabGeneral Ledger
ASSETS | |
101 | Cash |
122 | Accounts Receivable |
141 | Supplies |
181 | Office Equipment |
LIABILITIES | |
202 | Accounts Payable |
219 | Wages Payable |
252 | Bonds Payable |
EQUITY | |
321 | Common Stock |
322 | Paid-In Capital in Excess of Par-Common Stock |
329 | Paid-In Capital from Sale of Treasury Stock |
331 | Retained Earnings |
333 | Cash Dividends |
REVENUE | |
401 | Sales |
417 | Gain on Bonds Redeemed |
EXPENSES | |
511 | Wages Expense |
512 | Advertising Expense |
513 | Bank Credit Card Expense |
514 | Store Supplies Expense |
515 | Travel and Entertainment Expense |
549 | Miscellaneous Expense |
554 | Loss on Bonds Redeemed |
Prepare the journal entries to record (a), (b), and (c) on December 31.
(a) Assume the bonds are redeemed at face value.
General Journal Instructions
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GENERAL JOURNAL
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(b) Assume that $25,000 of the bonds are redeemed at 103.
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(C) Assume that $25,000 of the bonds are redeemed at 97.
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GENERAL JOURNAL
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