Question

Problem 10-05A Crane Company sold $4,800,000, 7%, 15-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on December 31. The bonds were sold at 96. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO At December 31, 2022, $8,000 of the bond discount had been amortized. Show the long-term liability balance sheet presentation of the bond liability at December 31, 2022. CRANE COMPANY Balance Sheet (Partial) choose the accounting period select an opening subsection name enter a balance sheet item $enter a dollar amount select between addition and deduction: enter a balance sheet item enter a dollar amount $enter a total of the two previous amounts SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO VIDEO At January 1, 2024, when the carrying value of the bonds was $4,704,000, the company redeemed the bonds at 104. Record the redemption of the bonds assuming that interest for the year had already been paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount enter an account title for the journal entry on January 1 enter a debit amount enter a credit amount

Answer 1

Credit Date Jan. 1, 2022 Account title and explanation Cash (4,800,000x96%) Discount on bonds payable Bonds payable Debit 4,608,000 192,000 4,800,000 Crane Company Balance sheet As on Dec. 31, 2022 Long-term liabilities Bonds payable Less: Discount on bonds payable (192,000-8,000) 4,800,000 184,000 4,616,000 Credit Date Jan. 1, 2024 Account title and explanation Bonds payable Loss on redemption of bonds payable Discount on bonds payable (4,704,000-4,800,000) Cash (4,800,000x104%) Debit 4,800,000 288,000 96,000 4,992,000