Solution:
Journal Entries | ||||
No. | Date | Particulars | Debit | Credit |
a | 01-Jan-22 | Cash Dr ($513,000*105%) | $5,38,650 | |
To Premium on Bond Payable | $25,650 | |||
To Bond Payable | $5,13,000 | |||
(To record issuance of bond) | ||||
b | 31-Dec-22 | Interest Expense Dr | $35,055 | |
Premium on Bond payable Dr ($25,650/30) | $855 | |||
To Interest payable ($513,000*7%) | $35,910 | |||
(To record accrual of Interest and Amorization of premium on issue) | ||||
c | 01-Jan-23 | Interest payable Dr | $35,910 | |
To Cash | $35,910 | |||
(To record Interest payment) | ||||
d | 01-Jan-52 | Bond Payable Dr | $5,13,000 | |
To Cash | $5,13,000 | |||
(To record retirement of the bond at maturity) |
Wildhorse Co. issued $513,000,7%, 30-year bonds on January 1, 2022, at 105. Interest is payable annually...
Wildhorse Co. issued $480,000, 9%, 30-year bonds on January 1, 2022, at 105. Interest is payable annually on January 1. Wildhorse uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2022. (c) The payment of interest on January 1, 2023....
Wildhorse Co. issued $513,000, 7%, 30-year bonds on January 1, 2022, at 105. Interest is payable annually on January 1. Wildhorse uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. The accrual of interest and the premium amortization on December 31, 2022 (b) (c) The payment of interest on January 1, 2023....
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