Question

. Hurst, Incorporated sold its 8% bonds with a maturity value of $4,500,000 on August 1, 2018 for $4,419,000. At the time of the sale the bonds had 5 years until they reached maturity. Interest on the bonds is payable semiannually on August 1 and February 1. The bonds are called at a price of 103 on August 1, 2020. Assume the Hurst used straight-line amortization. Prepare the journal entry to record the bond call. (2 points) Date Account Titles Debit Credit

Answer 1

Ans. Journal Entry Date Account tites Debit Credit 1108/2010 Bonds Payable $ 450D DOD locs on Redemption 58. f35 183.600 Discount on bonds Payable 448,600 Cash $4635.000 (450000D *1.031 (WN:17 BF = Balancing figure Working ALOTES 10 Calculation of discount on bonds payable on Face Value rasue price ? $ 450D0DD $ 142900D discount on bonds § 81000 Ghet Straight line amortization 2. BLOUD 10 $31.00 Sesmi asmerally Inamortized discount Cowor 6 48600