Question
Swanson Corporation issued $8,500,000 of 20-year, 8 percent bonds on April 1, 2013, at 102. Interest is due on March 31 and September 30 of
Swanson Corporation issued $8,500,000 of 20-year, 8 percent bonds on April 1, 2013, at 102. Interest is due on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2033. Swanson's financial year ends on December 31. Prepare the following journal entries: |
a. | Prepare the journal entry at April 1, 2013, to record the issuance of the bonds. (Omit the "$" sign in your response.) |
Date | General Journal | Debit | Credit |
Apr. 1, 2013 | (Click to select)Accounts receivableBond payableSalesPremium on bonds payableBond interest payableBond interest expenseAccounts payableCash | ||
(Click to select)Bond interest payableCashAccounts receivableAccounts payablePremium on bonds payable Bond payable Bond interest expenseSales | |||
(Click to select)Premium on bonds payable Accounts receivableBond interest payableBond interest expenseAccounts payableSalesCashBond payable | |||
b. | Prepare the journal entry at September 30, 2013, to pay interest and to amortize the bond premium. (Omit the "$" sign in your response.) |
Date | General Journal | Debit | Credit |
Sept. 30, 2013 | (Click to select)Bond payable SalesBond interest payableAccounts receivableAccounts payableCashPremium on bonds payable Bond interest expense | ||
(Click to select)CashSalesPremium on bonds payable Bond payable Accounts receivableBond interest payableAccounts payableBond interest expense | |||
(Click to select)Accounts payableBond interest expenseSalesBond PayableBond interest payablePremium on bonds payableAccounts receivableCash | |||
c. | Prepare the journal entry at March 31, 2033, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries). (Omit the "$" sign in your response.) |
Date | General Journal | Debit | Credit |
Mar. 31, 2033 | (Click to select)Accounts payableCashBond interest expenseBond payableSalesPremium on bonds payable Bond interest payableAccounts receivable | ||
(Click to select)Accounts payableBond interest payableSalesCashBond payableBond interest expenseAccounts receivablePremium on bonds payable | |||
(Click to select)Premium on bonds payable Accounts payableSalesBond interest expenseCashBond interest payableAccounts receivableBond payable | |||
(Click to select)Accounts payableBond payableBond interest expenseSalesPremium on bonds payableCashAccounts receivableBond interest payable | |||
Mar. 31, 2033 | (Click to select)Accounts payableCashBonds payableBond interest payableBond interest expenseSalesAccounts receivablePremium on bonds payable | ||
(Click to select)SalesCashBonds PayableAccounts receivableBond interest expenseBond interest payablePremium on bonds payableAccounts payable | |||
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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