Question
Presented below are selected transactions on the books of Simonson Corporation. May 1, 2014 Bonds payable with a par value of $902,400, which are dated
Presented below are selected transactions on the books of Simonson Corporation.
May 1, 2014 |
Bonds payable with a par value of $902,400, which are dated January 1, 2014, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 10% (payable annually at January 1), and mature January 1, 2024. (Use interest expense account for accrued interest.) | |
Dec. 31 |
Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. (Use straight-line amortization.) | |
Jan. 1, 2015 | Interest on the bonds is paid. | |
April 1 |
Bonds with par value of $361,300 are called at 102 plus accrued interest, and redeemed. (Bond premium is to be amortized only at the end of each year.) | |
Dec. 31 |
Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized. |
Prepare journal entries for the transactions above. Show all calculations.
5/1/14 | |||
12/31/14 | |||
(To record the interest)
12/31/14 | |||
(To amortize the premium)
1/1/15 | |||
4/1/15 | |||
12/31/15 | |||
(To record the interest)
12/31/15 | |||
( To amortize the premium)
Show all calculations.
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