Question
On January 1, 2009, General Bell Corp. issued at 97, 8% bonds with a par value of $800,000, due in 10 years. Interest is payable
On January 1, 2009, General Bell Corp. issued at 97, 8% bonds with a par value of $800,000, due in 10 years. Interest is payable semiannually on June 30 and December 31 of each year. In addition General Bell incurred bond issue costs totalling $16,000. 3 years after the issue date, on January 1, 2012, General Bell calls the entire issue at 101 and cancels it. General Bell amortizes discounts/premiums, using the straight-line method.
Required:
1) Record the necessary journal entries on:
a. January 1, 2009
b. June 30 and December 31, 2009
c. January 1, 2012
2) Assume that the bond was sold on March 1, 2009 for the same price as above plus accrued interest and record the necessary journal entries on:
a. March 1, 2009
b. June 30 and December 31, 2009
c. January 1, 2012
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
A New Auditors Guide To Planning Performing And Presenting IT Audits
Authors: Nelson Gibb, CIA, CISA, CISSP, Divakar Jain, CA, CPA, Amitesh Joshi, Surekha Muddamsetti, Sarabjot Singh
1st Edition
0894136852, 978-0894136856
