Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Use the following to answer Q 1 8 to Q 2 0 : On January 1 , 2 0 2 2 , OkiDokes Corp. issued

Use the following to answer Q18 to Q20:
On January 1,2022, OkiDokes Corp. issued 2,000 of its $1,000 face-value debentures at 103 due on January 1,2027. Interest payment dates are January 1 and July 1 of each year. The bonds have an interest rate of 12%. The company has adopted ASPE and the bonds are being amortized on a straight-line basis over the 5 years. Legal and issuance costs of $200,000 incurred are also being deferred and amortized on a straight-line basis with the bonds.
The journal entry prepared on January 1,2022 is:
Question 18Answer
a.
(dr) cash $1,860,000; (cr) bond payable $1,860,000
b.
(dr) cash $2,260,000; (cr) bond payable $2,260,000
c.
(dr) cash $2,060,000; (cr) bond payable $2,060,000
d.
None
e.
(dr) cash $1,860,000; (dr) bond issuance cost $200,000; (cr) bond payable $2,060,000
Question 19
Not yet answered
Marked out of 2.00
Flag question
Question text
The journal entry prepared for the interest payment and amortization on July 1,2024 is:
Question 19Answer
a.
(dr) interest expense $134,000; (cr) bond payable $14,000; (cr) cash $120,000
b.
(dr) interest expense $114,000; (dr) bond payable $6,000; (cr) cash $120,000
c.
(dr) interest expense $228,000; (dr) bond payable $12,000; (cr) cash $240,000
d.
(dr) interest expense $94,000; (dr) bond payable $26,000; (cr) cash $120,000
e.
None
Question 20
Not yet answered
Marked out of 2.00
Flag question
Question text
The bonds are callable at 114 of the face value, and on January 1,2025 OkiDokes Corp. called and retired all the bonds. What is the journal entry recorded for the bond retirement. Assume on January 1,2025 interest payment and amortization had already been recorded.
Question 20Answer
a.
None
b.
(dr) bonds payable $2,000,000; (dr) loss on redemption of bonds $280,000; (cr) cash $2,280,000
c.
(dr) bonds payable $2,104,000; (dr) loss on redemption of bonds $176,000; (cr) cash $2,280,000
d.
(dr) bonds payable $2,024,000; (dr) loss on redemption of bonds $256,000; (cr) cash $2,280,000
e.
(dr) bonds payable $1,944,000; (dr) loss on redemp

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Cases

Authors: Camillo Lento, Jo-Anne Ryan

3rd Canadian Edition

1119594642, 978-1119594642

More Books

Students also viewed these Accounting questions

Question

What is the effect of word war second?

Answered: 1 week ago

Question

What impediments originate in society at large?

Answered: 1 week ago

Question

How have their tactics changed?

Answered: 1 week ago

Question

What impediments have financial or economic origins?

Answered: 1 week ago