Question

FINANCIAL ACCOUNTING II Effective April 1, 2016, The Syracuse Corporation, which has a year- end of December 31st, authorized $1,500,000 of callable, mortgage bonds (secured by $2,200,000 of property and equipment, at market value). The bonds paid interest at a rate of eight percent per year and had a term of six years. Interest was payable each September 30th and March 31st On July 1, 2017. Syracuse issued 1,000 of the bonds in exchange for cash in the total amount of $906,000. On October 1, 2019, Syracuse called the bonds and paid the current bondholders $1,150,000 in cash Prepare the journal entries related to the bonds that the corporation entered into its records during the period April 1, 2016 through December 31, 2017 In addition, prepare the journal entry that was recorded when the bonds were redeemed in October 2019.

Answer 1

Date Answer I Debit Cred Accounts Iltles & Explanation Journal Entry Hequired. 2014 No 1 Cash Discount on bonds payable 1000000 - 906000 1940007 $906000 $94000 $1,000,000 Bonds payable [to seconds ague of bonde for cash $906000 and dis count on bonds) sept on the Interest Expense 200000+ 3917 (23917) (WN-2) Csopol canner $ 23,917

payble (WN-a) Dis count on Bonds Cash & 3,917 | $ popoo paid and discount amonuized) (to recoord Interest Declai/2017 Interest Expense $23917 (20000 +3917) 23917 payable Discount on bonds Intorst payable Cro recoord interest 1$ 3917 $ 20,000 accolued and discount amouillzed) Bonds payable Loss on Early Extinguishment of bonde (balancing Pigeon $1000000 Discount on Bonds payable (WN-2) Scancosh with Cachoragecord redemption of Bands & discount vnamoxteaed $,780 $141 50,000

* Interest Expense (10oooo X 8%) X3 1Q (100000 X 0.08)x3 12 8000 X 3 12 24000 12 2000 . * Discount on bonds payable 94000_ 3916.66667 (Famonths) X3 = à = 9H000 216 = 1$3917) * Dis count on Bonds payable (Uramosefiaclancunt discount on Bonds payable was amosefized es cams for a7 months (July 19 2017 to Oekokeslakova Scanned aith CamScartoo

☺ Demaining ung cha mosuluized 14000 - 2)xa = 94000 – 1305.55x3 =94000_ 3916.66668 = 94000-39168 $54832 Scanned with CamScanner