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 31. 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

PO Answers July 1, 2017, Discount on bonds payable = 1,000,000 – 906,000 =$94,000 Sept 30, 2017, interest Expense = (lococco x86)* 32) + (94000/C+ a month) x3) = (80000x )+(1305,555556x3) = 20000+3917. = 23,917 Oct 1, 2019, Discount on bords peable = 94000 - (94000|79) * 27 (unamortized cupounty = 94000 - 35250 1758,750 "discount on bonds payable was amot fräcol for a7 months, 41,2017 to October 1, 2019) remaining was unamortised

Debit (4) credit $906,000 $94,000 $1,000,000 $ 23,917 $ 3,917 Dati Account Title & Explanation April 1, 2016 No Tournal Entry required Cash July, dort Discovent on bonds poupable bonds payable sept 30, 2017 interest Expense Discount on bona's payable cash interest Expense Discount on bonds payable interest payable bonds payable loss on Early extingeishment of bonds Discount on bonds payable $ 20,000 $23,917 Dec 31, 2017 $3,917 $ 20,000 Oct 1, 2019 $1,000,000 $908,750 $58,750 cash. $1,150,000