Question
PLEASE correct the boxes in RED. the Boxes in GREEN are correct. Please show all work to ensure accuracy, and answer the question as is.
PLEASE correct the boxes in RED. the Boxes in GREEN are correct. Please show all work to ensure accuracy, and answer the question as is. Thank you
On September 30, 2012, Lena Co. issued 11% bonds with a par value of $430,000 due in 20 years. They were issued at 98 and were callable at 105 at any date after September 30, 2017. Because Lena Co. was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 9% bonds were sold in the amount of $810,000 at 104; they mature in 20 years. Lena Co. uses straight-line amortization. Interest payment dates are March 31 and September 30.
Prepare journal entries to record the redemption of the old issue and the sale of the new issue on September 30, 2018. (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 0 for the amounts.) Debit Credit Account Titles and Explanation Bonds Payable Loss on Redemption of Bonds 430,000 27,520 Discount on Bonds Payable 5,020 Cash 451,500 To record the redemption of old issue) Cash 842,400 Premium on Bonds Payable 32,400 Bonds Payable 810,000 To record the sale of new issue)Step by Step Solution
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