Question
Please do not copy from Chegg. I need the correct and well-explained answer. Prepare journal entries to record the following transactions relating to long-term bonds
Please do not copy from Chegg. I need the correct and well-explained answer.
Prepare journal entries to record the following transactions relating to long-term bonds of ABC Inc.: a) On June 1st, 2017, ABC, Inc issued $8,000,000, 6% bonds for 7,841,000, which includes accrued interest. Interest is payable semiannual on Feb. 01 and Aug. 01 with the bonds maturing on Feb. 01, 2027. The bonds are callable at 102. b) On Aug. 01, 2017, ABC paid interest on the bonds and recorded amortization. ABC uses straight-line amortization. c) On Feb. 01, 2019, ABC paid interest and recorded amortization on all of the bonds, and purchased $5,000,000 of the bonds at the call price. Assume that a reversing entry was made on January 1, 2019.
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