Question

P10-4A Kershaw Electric sold $6,000,000, 10%, 15-year bonds on Janua bonds were dated January 1, 2017, and paid interest on January 1. The bo at 98. ear bonds on January 1, 2017. The on January 1. The bonds were sold 488

Answer 1

Solution a:

Journal Entries - Kershaw Electric
Date	Particulars	Debit	Credit
1-Jan-17	Cash Dr	$5,880,000.00
	Discount on bond payable Dr	$120,000.00
	To Bond Payable		$6,000,000.00
	(To record isue of bond)

solution b:

Kershaw Electric
Balance Sheet (Partial)
As of Dec 31, 2017
Particulars		Amount
Long term liabilities:
Bond Payable	$6,000,000.00
Less: Discount on bond payable	$112,000.00
Net bond liability		$5,888,000.00

Solution c:

Journal Entries - Kershaw Electric
Date	Particulars	Debit	Credit
1-Jan-19	Bond Payable Dr	$6,000,000.00
	Loss on bond retirement Dr	$224,000.00
	To Cash		$6,120,000.00
	To Discount on bond payable		$104,000.00
	(To record bond repayment)