Question

ent Exercise 14-13 Blossom, inc. had outstanding S6 430,000 of 10% bonds (interest payable July 3 1 and January 3) de in l years. On M, , t ssued S, 28 000 se m·s-rerbonds (intrest payable )uly 1 and January 1) at 97. A portion cr the proceeds was used to call the i 0% bonds (with unamortized discount or sig,900) at î03 on Agust . Prepare the journal entries necessary to record issue of select "No Entry" for the account titles and enter O for the amounts. Credit account t Date Account Titles and Explanation July 1 the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, Debit Credit (To record issuance of 9% bonds) August 1 (To record retirement of 10% bonds) SUBHET ANSWER Question Attempts: O of 3 used SAVE FOR LATE Version 4.24.11.5

Answer 1

All working forms part of the answer

Date	Accounts title	Debit	Credit	Working/Explanation
Jul-01	Cash	$9,001,600		[9280000 x 97/100]
	Discount on Bonds Payable	$278,400		[9280000 - 9001600]
	Bonds Payable [9%]		$9,280,000	[face value of new bonds]
	(bonds issued)
Aug-01	Bonds payable [10%]	$6,430,000		[Face value of 10% bonds]
	Loss on retirement of Bonds	$385,800		[6622900 + 192900 - 6430000]
	Discount on Bonds Payable		$192,900	[Unamortised amount now credited]
	Cash		$6,622,900	[$ 6430000 x 103/100]
	(Retirement of Bond)