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The following is taken from AL & Co. balance sheet: AL & Co Partial Balance Sheet 31-Dec-20 Current Liabilities Interest payable 240,000 Long Term Liabilities
The following is taken from AL & Co. balance sheet: AL & Co Partial Balance Sheet 31-Dec-20 Current Liabilities Interest payable 240,000 Long Term Liabilities Bonds payable 6%, due Jan 1, 2026 Less: discount on bonds ayable 4,000,000 200,000 3,800,000 Interest is payable annually on January 1st. The bonds are callable on any annual interest date. AL uses straight line amortization for any bond discount or premium. From Decemebr 31, 2020 the bonds will be outstanding for another 5 years, (60 months) A) Journalize the payment of the bond interest on January 1, 2021 B) Prepare the entry to amortize the bond discount and to accrue the interest due on Decemebr 31, 2021 C) Assume that on January 1, 2023, after paying interest, AL calls bonds having a face value of $2,000,000 The call price is 102. Record the redemption of the bonds D) Prepare the journal entry at December 31, 2023, to amortize the bond discount and to accrue interest on the remaning bonds
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