Problem 10-4A (Part Level Submission) On October 1, 2016, Culver Corp. issued $936,000, 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 Oct. 1, 2016 Cash Debit Credit 936,000| || 936,000 Bonds Payable Click if you would like to Show Work for this question: Open Show Work Attempts: 1 of 1 used (b) Your answer is correct. Prepare the adjusting entry to record the accrual of interest on December 31, 2016. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2016 Interest Expense xpense 18,720|| || 18,720 Interest Payable Click if you would like to Show Work for this question: Open Show Work Attempts: 1 of 1 used Your answer is correct. Show the balance sheet presentation of bonds payable and bond interest payable on December 31, 2016. CULVER CORP. Balance Sheet (Partial) December 31, 2016 Current Liabilities Interest Payable 18,720 Long-term Liabilities Bonds Payable 936,000 Click if you would like to Show Work for this question: Open Show Work Attempts: 1 of 1 used (d) Your answer is correct. Prepare the journal entry to record the payment of interest on October 1, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Date Account Titles and Explanation Oct. 1, 2017 Interest Expense Interest Payable Cash 74,880 Click if you would like to Show Work for this question: Open Show Work Attempts: 1 of 1 used (e) Your answer is correct. Prepare the adjusting entry to record the accrual of interest on December 31, 2017. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Dec. 31, 2017 Interest Expense Debit Credit 187201 L 18720 Interest Payable (f) Assume that on January 1, 2018, Culver pays the accrued bond interest and calls the bonds. The call price is 102. 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 (To record payment of interest) Jan. 1, 2018 (To record the redemption of the bonds)
