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This document contains journal entries for two bond transactions over multiple years: 1) A $600,000 bond issued in 2017 with 9% annual interest paid semiannually. The bond was redeemed in full in 2019 for $612,000, resulting in a $12,000 loss on redemption. 2) A $2,400,000 bond issued in 2017 with 9% annual interest paid annually. $800,000 of the bond was redeemed in 2018 for $816,000, resulting in a $43,000 loss. The remaining balance of $1,600,000 was outstanding in 2018.

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42 views3 pages

Up 1

This document contains journal entries for two bond transactions over multiple years: 1) A $600,000 bond issued in 2017 with 9% annual interest paid semiannually. The bond was redeemed in full in 2019 for $612,000, resulting in a $12,000 loss on redemption. 2) A $2,400,000 bond issued in 2017 with 9% annual interest paid annually. $800,000 of the bond was redeemed in 2018 for $816,000, resulting in a $43,000 loss. The remaining balance of $1,600,000 was outstanding in 2018.

Uploaded by

AnanKay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd

PROBLEM 10- 3A

2017
A.)
May-01 CASH 600,000
BONDS PAYABLE 600,000

B.)
Dec-31 INTEREST EXPENSE 36,000
INTEREST PAYABLE 36,000
(600,000*9%*8/12)

C.) NON CURRENT LIABILITIES


BONDS PAYABLE, DUE 2022 600,000

CURRENT LIABILITIES
INTEREST PAYABLE 36,000

2018
D.)
May-01 INTEREST PAYABLE 36,000
INTEREST EXPENSE 18,000
(600,000*9%*4/12)
CASH 54,000

E.)
Dec-31 INTEREST EXPENSE 36,000
INTEREST PAYABLE 36,000
(600,000*9%*8/12)

2019
F.)
Jan-01 INTEREST PAYABLE 36,000
CASH 36,000
BONDS PAYABLE 600,000
LOSS ON BOND REDEMPTION 12,000
CASH (600,000*1.02) 612,000
PROBLEM 10- 9B

2017
A.)
Jan-01 INTEREST PAYABLE 216,000
CASH 216,000

B.)
Dec-31 INTEREST EXPENSE 225,000
BONDS PAYABLE (90,000/10) 9000
INTEREST PAYABLE 216,000
(2,400,000*.09)

2018
C.)
Jan-01 BONDS PAYABLE 773,000
LOSS ON BOND REDEMPTION 43000
CASH (800,000*102%) 816000

D.)
Dec-31 INTEREST EXPENSE 150,000
BONDS PAYABLE 6000
INTEREST EXPENSE 144000
(2310000+9000*1/3)

( 90,000/10*2/3)
(2400000*2/3*9%)

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