Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What's the answer to C? Analyzing Financial Statement Effects of Bond Redemption Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 96 on July 1,

What's the answer to C?

image text in transcribed

Analyzing Financial Statement Effects of Bond Redemption Dechow, Inc., issued $250,000 of 8%, 15-year bonds at 96 on July 1, 2012. Interest is payable semiannually on December 31 and June 30. Through June 30, 2019, Dechow amortized $3,186 of the bond discount. On July 1, 2019 Dechow retired the bonds at 101. Required a. Prepare journal entries to record the issue and retirement of these bonds. (Assume the June interest expense has already been recorded.) General Journal Date Description Debit Credit 07/01/12 Cash 240,000 0 Bond discount 10,000 0 Bonds payable 0 250,000 07/01/19 Bonds payable 250,000 Loss on retirement of bonds 9,314 Bond discount 6,814 Cash 0 252,500 0 0 0 b. Post the journal entries from part a to their respective T-accounts. Cash (A) Bonds Payable (L) 07/01/12 240,000 0 07/01/12 0 250,000 07/01/19 0 252,500 07/01/19 250,000 0 Loss on Retirement of Bonds (E) E 07/01/12 0 0 07/01/19 9,314 0 07/01/12 07/01/19 Bond Discount (XL) 10,000 0 6,814 0 c. Record each of the transactions from part a in the financial statement effects template. Remember to use negative signs, when appropriate. Balance Sheet Income Statement Noncash Contrib. Earned Transaction Cash Asset Asset Liabilities + Contra-Liabilities + Capital + Capital Revenues Expenses Net Income 7/1/12 Issue bonds at a discount $ 240,000 + $ 0 = $ 250,000+ $ 10,000+ $ 0 + $ 0$ 0 0 = $ 0 7/1/19 Retire bonds Issued on 7/1/12 $ 252,500 X + $ 0 = $ 250,000 X + $ 0x + $ 0 + $ 0 x $ 0 $ 0 X = $ 0 X Check

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

Step: 3

blur-text-image

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

Authors: David Spiceland

6th Edition

1260786528, 9781260786521

More Books

Students also viewed these Accounting questions

Question

Make eye contact when talking and listening

Answered: 1 week ago

Question

Do not go, wait until I come

Answered: 1 week ago

Question

Pay him, do not wait until I sign

Answered: 1 week ago