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Problem 1: Kapral Company sold $1,000,000, five-year, 5% bonds on January 1, 2020 at 98. The bonds pay annual interest on January 1. The company
Problem 1: Kapral Company sold $1,000,000, five-year, 5% bonds on January 1, 2020 at 98. The bonds pay annual interest on January 1. The company uses straight-line amortization. Instructions: Complete a bond amortization schedule for 2021 and 2022. Prepare all journal entries for: (a) 2020 and 2021. (b) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Problem 2: On March 1, Cooper Company borrows $80,000 from New National Bank by signing a 6-month, 6%, interest-bearing note. Instructions: Prepare the necessary entries below associated with the note payable on the books of Cooper Company. (a) Prepare the entry on March 1 when the note was issued. (b) Prepare any adjusting entries necessary on June 30 in order to prepare the semiannual financial statements. Assume no other interest accrual entries have been made. (c) Prepare the entry to record payment of the note at maturity. Problem 3: Miles Co. had these transactions during the current period. Jun-12 Jul-11 Nov-28 Issued 50,000 shares of $3 stated value common stock for cash of $250,000. Issued 2,000 shares of $100 par value preferred stock for cash at $108 per share. Purchased 2,000 shares of treasury stock for $10,000. Instructions: Prepare the journal entries for the preceding transactions. Problem 4: On January 1, 2020, Browning Corporation had 75,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar-01 Issued 90,000 shares of common stock for $675,000. Jun-01 Declared a cash dividend of $2.00 per share to stockholders of record on June 15. Jun-30 Paid the $2.00 cash dividend. Dec-01 Purchased 5,000 shares of common stock for the treasury for $18 per share. Dec-15 Declared a cash dividend on outstanding shares of $2.50 per share to stockholders of record on December 31. Net income for 2020 amounted to $951,000. Instructions: Prepare all journal entries to record the above transactions
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