When a company uses the accrual basis of accounting, it records expenses in the period they were incurred, even if expense was not paid in that period.
Instructions a Indicate whether the bonds were issued at a premium or a discount and how you can determine this fact from the schedule.
Interest is paid January 1. Capulet Corporation does not use reversing entries. These bonds were issued on January 1,and pay interest annually on each January 1. Instructions a Prepare the journal entry to record the issuance of the bonds on January 1, Prepare the journal entry to record this redemption.
Because many new car buyers need financing, Good-Deal offered a low downpayment and low car payments for the first year after purchase.
It believes that this promotion will bring in some new buyers. After this one-year period, the customer was required to make regular quarterly payments that would pay off the loan as of January 1, Instructions a Prepare a note amortization schedule for the first year.
The indenture securing the new issue did not provide for any sinking fund or for redemption before maturity. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, Give entries through December 31, The bonds pay interest on December 1 and June 1.
The due date of the bonds is June 1, Give entries through December 1, Instructions For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective-interest method for discount and premium amortization construct amortization tables where applicable.
Amortize premium or discount on interest dates and at year-end. Assume that no reversing entries were made. Use interest expense account for accrued interest. Bond premium is to be amortized only at the end of each year. Instructions Round to two decimal places.
Prepare journal entries for the transactions above. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. At this time, the accrued interest was paid in cash. Instructions Prepare the journal entries needed on the books of Seminole Company to record the following.
No reversing entries made. Instructions Round answers to the nearest cent. Instructions Prepare the journal entries that would be recorded for the purchase and for the payments and interest on the following dates.
Round answers to the nearest cent. Issuance, Classification, Reporting The following are four independent situations. The bonds are dated January 1,and pay interest semiannually on July 1 and January 1.
In addition, Wilke Co. Compute the net amount of cash received by Wilke Co. The bonds are dated January 1,and pay interest annually. What amount is reported for interest expense in related to these bonds, assuming that Langley used the effective-interest method for amortizing bond premium and discount?
These long-term bonds have the following sinking fund requirements and maturities for the next 6 years. Indicate how this information should be reported in the financial statements at December 31, Determine the total amount, if any, of debenture bonds outstanding.
Furthermore, she cannot understand why GAAP requires that this method be used instead of the straight-line method. She has come to you with the following problem, looking for help.Prepare journal entries to record the following transactions related to long-term bonds of Quirk Co.
(a) On April 1, , Quirk issued $,, 9% bonds for $, including accrued interest. Interest is payable annually on January 1, and the bonds mature on January 1, p Chapter Long-Term Liabilities. Chapter 13 focused on corporate equity transactions, including stock issuances and dividends.
We also explained how to report and analyze. (d) Prepare the journal entry to record the payment of interest and the amortization of the discount on July 1, , assuming that interest was not accrued on June (e) Prepare the journal entry to record the accrual of interest and the amortization of the discount on December 31, %(39).
Mar 14, · (b) Prepare the entry required on December 31, , to record the payment of the first 6 months’ interest and the amortization of premium on the bonds. E (L01,2) (Entries for Redemption and Issuance of Bonds) Jason Day Company had bonds outstanding with a .
Use the above straight·line bond amortization table and prepare journal entries for the following. (a) The issuance of bonds on December 31, (b)The first interest payment on June 30, Prepare the journal entry to record the accrual of Interest and the amortization of the premium on December 31, (Round answers to 0 decimal places, a p.
15, Credit account titles are automatically indented when amount is entered.