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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
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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
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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

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