Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On October 1, 2021, Blue Corp. issued $732,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually
On October 1, 2021, Blue Corp. issued $732,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2021, and pay interest annually on October 1. Financial statements are prepared annually on December 31.
Part 1 Your answer is correct. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Oct. 1.2021 Cash 732000 Bonds Payable 732000 eTextbook and Media List of Accounts Attempts: 1 of 15 used Part 2 Your answer is correct. Prepare the adjusting entry to record the accrual of interest on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec 31, 2021 Interest Expense 14640 Interest Payable 14640 e Textbook and Media Part 3 Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2021. BLUE CORP. Balance Sheet (Partial) December 31, 2021 Part 4 Your answer is partially correct. Prepare the journal entry to record the payment of interest on October 1.2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Oct. 1, 2022 Cash 732000 Premium on Bonds Payable 14640 Bonds Payable 14640 eTextbook and Media List of Accounts Save for Later Attempts: 1 of 15 used Submit Answer Part 5 Prepare the adjusting entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec 31, 2022 e Textbook and Media List of Accounts Save for Later Attempts: 0 of 15 used Submit Answer Part 6 Assume that on January 1, 2023, Blue pays the accrued bond interest and calls the bonds. The call price is 105. Record the payment of interest and redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2023 (To record payment of interest) Jan. 1.2023 (To record the redemption of the bonds)
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