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Problem 15-07A a-d The following is taken from the Crane Company balance sheet. Crane Company Balance Sheet (partial) December 31, 2020 Current Liabilities Interest payable
Problem 15-07A a-d The following is taken from the Crane Company balance sheet. Crane Company Balance Sheet (partial) December 31, 2020 Current Liabilities Interest payable (for 12 months from January 1 to December 31) Long-term Liabilities Bonds payable, 6% due January 1, 2028 Add: Premium on bonds payable $150,000 $2,500,000 171,000 $2,671,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. Crane uses straight-line amortization for any bond premium or discount. From December 31, 2020, the bonds will be outstanding for an additional 10 years (120 months). Journalize the payment of bond interest on January 1, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan 1, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2021 SHOW LIST OF ACCOUNTS LINK TO TEXT Assume that on January 1, 2022, after paying interest, Crane Company calls bonds having a face value of $1,000,000. The call price is 101. Record the redemption of the bonds. (Credit account tities are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1, 2022 SHOW LIST OF ACCOUNTS Prepare the adjusting entry at December 31, 2022, to amortize bond premium and to accrue interest on the remaining bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31, 2022 Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT
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