Question

3.1

On April 1, 2021, Western Communications, Inc., issued 12% bonds, dated March 1, 2021, with face amount of $43 million. The bonds sold for $42.3 million and mature on February 28, 2024. Interest is paid semiannually on August 31 and February 28. Stillworth Corporation acquired $43,000 of the bonds as a long-term investment. The fiscal years of both firms end December 31, and both firms use the straight-line method. Required: 1. Prepare the journal entries to record (a) issuance of the bonds by Western and (b) Stillworth's investment on April 1, 2021. 2. Prepare the journal entries by both firms to record all subsequent events related to the bonds through maturity. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Western Red 2 Stillworth Prepare the journal entries for Western Communications, Inc., to record all subsequent events related to the bonds through maturity. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 9 10 Record interest expense for Western Communications. Note: Enter debits before credits General Journal Debit Credit Date August 31, 2021 < Prey 3 of 3 DIE Next > Week in

Answer 1

In the books of westren Communications $ Debit Credit 42.3m 0.7m DY 2021 D7 Date Partialan marchi Bank Alc Profit & loss alc lay bonds Ale (being bonds issued at a discount] 10 43 m м 2.58m ao 658m or Bank August si Intrest Expenses Ale To bond holders Alc u3 x lay. X 6/12] [Being Interest Paid Expenses Ac bond holders/Bank Ale [Being Intrest Paid]. February Interest 968 ) 28 2022 28 70 Q58 ) Augusta Intrest Expenses ale To bond boulders / Bank Alc (Being intrest Paid] 2022 12.58m

waitinimummid med en perlund soft of $ $ Date Particulars & February Interest Ale Debit credit | 8:54 m 28 Qoną Q58 To bond halders / Bank Alc (Being intrest Paid August 31 na 11 11 11 11 2022 11 11 li 11 11 Febas a0a3 11 " 11 August 31 2023 ll 11 11 19 Feb28 2024

Journal entries in the books of still worth's Dv 43000 2oal TO 43000 Dr 2150 2580 2021 TO 2150 2880 Date Particulars Ibebit credit Apriall aprel Investment in bonds Alc Bank al [Being bonds of $ 43.000 are Purchard Aug 31 Bank Ale intrest income Alc CBeing invest income received ] (43000 x lay, x 5/12] Febas Bank Alc doaa To intrest income al CBeing intrest in Come received] Aragust Dr as 80 asso 11 11 11 11 11 аваа Feb 28 2023 19 u1 1 y Aug 31 ll !1 11 2023 11 Feb 28 2024 ht li 11 "