The long-term liability section of Johnson Laboratories balance sheet as of December 31, 2014, included 10% bonds having a face amount of $230 million and a remaining premium of $9.8 million. On January 2, 2015, Johnson retired some of the bonds before their scheduled maturity.
Required: Prepare the journal entry by Johnson to record the redemption of the bonds under each of the independent circumstances below:
1. Johnson called half the bonds at the call price of 103.6. (4 pts)
2. Johnson repurchased $92 million of the bonds on the open market at their market price of $97.5 million. (4 pts)
No. | Account Titles and Explanation | Debit | Credit |
1 | Bonds payable ($230000000/2) | 115000000 | |
Premium on bonds payable ($9800000/2) | 4900000 | ||
Gain on redemption of bonds | 760000 | ||
Cash ($230000000/2 x 103.6/100) | 119140000 | ||
(To record redemption of bonds) | |||
2 | Bonds payable | 92000000 | |
Premium on bonds payable ($9800000 x 92/230)) | 3920000 | ||
Loss on redemption of bonds | 1580000 | ||
Cash | 97500000 | ||
(To record redemption of bonds) |
The long-term liability section of Johnson Laboratories balance sheet as of December 31, 2014, included 10%...
The long-term liability section of Johnson Laboratories balance sheet as of December 31, 2014, included 10% bonds having a face amount of $230 million and a remaining premium of $9.8 million. On January 2, 2015, Johnson retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Johnson to record the redemption of the bonds under each of the independent circumstances below: 1. Johnson called half the bonds at the call price of 103.6. 2. Johnson...
The long-term liability section of Eastern Post Corporation's balance sheet as of December 31, 2020, included 11% bonds having a face amount of $40.4 million and a remaining premium of $6.1 million. On January 1, 2021, Eastern Post retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below: 1. Eastern Post called half the bonds at the call price...
The long-term liability section of Eastern Post Corporation’s balance sheet as of December 31, 2020, included 12% bonds having a face amount of $41.6 million and a remaining premium of $6.4 million. On January 1, 2021, Eastern Post retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below: 1. Eastern Post called half the bonds at the call price...
The long-term liability section of Eastern Post Corporation’s balance sheet as of January 1, 2018, included 10% bonds having a face amount of $40 million and a remaining premium of $6 million. On January 1, 2018, Eastern Post retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below: 1. Eastern Post called half the bonds at the call price...
The long-term liability section of Eastern Post Corporation's balance sheet as of December 31, 2020, included 10% bonds having a face amount of $40 million and a remaining premium of $6 million. On January 1, 2021, Eastern Post retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below: 1. Eastern Post called half the bonds at the call price...
The long-term liability section of Eastern Post Corporation's balance sheet as of December 31, 2020, included 11% bonds having a face amount of $40.4 million and a remaining premium of $6.1 million. On January 1, 2021, Eastern Post retired some of the bonds before their scheduled maturity. Required: Prepare the journal entry by Eastern Post to record the redemption of the bonds under each of the independent circumstances below: 1. Eastern Post called half the bonds at the call price...
The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 14% bonds having a face amount of $40 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 16%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 101 ($40.4 million) before their scheduled maturity. Required:...
The long-term liability section of Twin Digital Corporation's balance sheet as of December 31, 2020, included 12% bonds having a face amount of $40 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2021, Twin Digital retired the bonds at 103 ($41.2 million) before their scheduled maturity. Required:...
The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2017, included 12% bonds having a face amount of $30 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2018, Twin Digital retired the bonds at 102 ($30.6 million) before their scheduled maturity. Required:...
The long-term liability section of Twin Digital Corporation’s balance sheet as of December 31, 2017, included 12% bonds having a face amount of $25 million and a remaining discount of $1 million. Disclosure notes indicate the bonds were issued to yield 14%. Interest expense is recorded at the effective interest rate and paid on January 1 and July 1 of each year. On July 1, 2018, Twin Digital retired the bonds at 104 ($26.0 million) before their scheduled maturity. Required:...