Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On April 1, 2020, Sweet Company sold 22,500 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and

On April 1, 2020, Sweet Company sold 22,500 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2021, Sweet took advantage of favorable prices of its stock to extinguish 5,400 of the bonds by issuing 178,200 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2021. Prepare the journal entries needed on the books of Sweet Company to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) April 1, 2020: issuance of the bonds. (b) October 1, 2020: payment of semiannual interest. (c) December 31, 2020: accrual of interest expense. (d) March 1, 2021: extinguishment of 5,400 bonds. (No reversing entries made.) No. Date (a) Account Titles and Explanation 4/1/20cash Discount on Bonds Payable Bonds Payable (b) 10/1/20 Interest Expense Discount on Bonds Payable Cash (c) 12/31/20Interest Expense Discount on Bonds Payable Interest Payable (d) 3/1/21 Interest Payable 3/1/21 Interest Expense Discount on Bonds Payable Cash (To record interest and discount on bonds retired) Bonds Payable Loss on Redemption of Bo Discount on Bonds Payable Common Stock Paid-in Capital in Excess of (To record extinguishment of the bonds) Debit Creditimage text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Construction Accounting And Financial Management

Authors: Steven J. Peterson

4th Edition

0135232872, 978-0135232873

More Books

Students also viewed these Accounting questions

Question

1. Empirical or factual information,

Answered: 1 week ago

Question

1. To take in the necessary information,

Answered: 1 week ago