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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 Q to Q:
On January OkiDokes Corp. issued of its $ facevalue debentures at due on January Interest payment dates are January and July of each year. The bonds have an interest rate of The company has adopted ASPE and the bonds are being amortized on a straightline basis over the years. Legal and issuance costs of $ incurred are also being deferred and amortized on a straightline basis with the bonds.
The journal entry prepared on January is:
Question Answer
a
dr cash $; cr bond payable $
b
dr cash $; cr bond payable $
c
dr cash $; cr bond payable $
d
None
e
dr cash $; dr bond issuance cost $; cr bond payable $
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The journal entry prepared for the interest payment and amortization on July is:
Question Answer
a
dr interest expense $; cr bond payable $; cr cash $
b
dr interest expense $; dr bond payable $; cr cash $
c
dr interest expense $; dr bond payable $; cr cash $
d
dr interest expense $; dr bond payable $; cr cash $
e
None
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The bonds are callable at of the face value, and on January OkiDokes Corp. called and retired all the bonds. What is the journal entry recorded for the bond retirement. Assume on January interest payment and amortization had already been recorded.
Question Answer
a
None
b
dr bonds payable $; dr loss on redemption of bonds $; cr cash $
c
dr bonds payable $; dr loss on redemption of bonds $; cr cash $
d
dr bonds payable $; dr loss on redemption of bonds $; cr cash $
e
dr bonds payable $; dr loss on redemp
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