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part (f) please Problem 10-4A (Part Level Submission) On October 1, 2016, Novak Corp. issued $840,000, 8%, 10-year bonds at face value. The bonds were
part (f) please
Problem 10-4A (Part Level Submission) On October 1, 2016, Novak Corp. issued $840,000, 8%, 10-year bonds at face value. The bonds were dated October 1, 2016, and pay interest annually on October 1. Financial statements are prepared annually on December 31. (a) 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, 2016 Cash 840,000 Bonds Payable 840,000 (b) Your answer is correct. Prepare the adjusting entry to record the accrual of interest on December 31, 2016. (Credit account tit Date Account Titles and Explanation Debit Credit Dec 31, 2016 Interest Expense 16800 Interest Payable 16800 (c) Your answer is correct. Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2016. NOVAK CORP. Balance Sheet (Partial) December 31, 2016 Current Liabilities Interest Payable 16800 $1 Long-term Liabilities Bonds Payable 840000 (d) Your answer is correct. Prepare the journal entry to record the payment of interest on October 1, 2017. (Credit account titles a Date Account Titles and Explanation Debit Credit Oct. 1, 2017 Interest Expense 50400 Interest Payable 16800 Cash 67200 Your answer is correct. Prepare the adjusting entry to record the accrual of interest on December 31, 2017. (Credit account titles are Debit Credit Date Account Titles and Explanation Dec. 31, 2017 Interest Expense 16800 Interest Payable 16800 (f) Your answer is partially correct. Try again. Assume that on January 1, 2018, Novak 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, 2018 Interest Payable 16800 Cash 16800 (To record payment of interest) Jan. 1, 2018 Bonds Payable 840,000 Loss on Bond Redemption Cash (To record the redemption of the bonds)Step by Step Solution
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