Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On May 1, 2021, Crane Corp. Issued $895,000 of 5-year, 6% bonds at 97. The bonds pay interest annually on May 1, Crane's year end

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
On May 1, 2021, Crane Corp. Issued $895,000 of 5-year, 6% bonds at 97. The bonds pay interest annually on May 1, Crane's year end is April 30 Record the issue of the bonds on May 1, 2021. (Credit account tities are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts:) Date Account Titles and Explanation Debit Credit May 1 Calculate the effective rate of the bonds using Excel or a financial calculator. (Round answer to 4 decimal places, eg. 1.5751) Effective rate % Prepare an effective interest amortization table for this bond. (Round answers to decimal places, eg. 5,276.) Crane CORP. Bond Discount Amortization Table Effective Interest MethodAnnual Interest Payments Interest Expense Discount Amortization Date Interest Payment Bond Amort May $ 1. 2021 May 1. 2022 May 1. 2023 May 1 Record the accrual of interest at April 30, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to decimal places, eg,5,276.) Date Account Titles and Explanation Debit Credit Apr 30 (To accrue interest expense.) Record the interest payment on May 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Debit Credit Date Account Titles and Explanation May 1 (To record interest payment) Assuming instead that Crane has a December 31, 2021, year end, prepare the adjusting entry relating to these bonds and the subsequent interest payment on May 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to decimal places, eg. 5,276) Date Account Titles and Explanation Debit Credit Dec 31 To accrue interest expense.) May 1 Assume that on May 1, 2022, after payment of the interest, Crane redeems all of the bonds at 103. Record the redemption of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts. Round answers to O decimal places, eg. 5,276.) Date Account Titles and Explanation Debit Credit May 1 (To record redemption of bonds.)

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

CyRM Mastering The Management Of Cybersecurity Internal Audit And IT Audit

Authors: David X Martin

1st Edition

0367757850, 978-0367757854

More Books

Students also viewed these Accounting questions

Question

Directory structure diagram

Answered: 1 week ago

Question

Find the derivative of y= cos cos (x + 2x)

Answered: 1 week ago