Question

can you show me steps how to slove each please.

(1) Devar Company sells exercise machines for home use. The machines carry a 2-year warranty. Past experience indicates that 6% of the units sold will be returned during the warranty period for repairs. The average cost of repairs under warranty is $80 for labor and $120 for parts per unit. During 2019, 2,500 exercise machines were sold at an average price of $1,000. During the year, 60 of the machines that were sold were repaired at the average price per unit. (2) Sarina Corporation purchased $350,000 of its bonds on June 30, 2018, at 102 and immediately retired them. The carrying value of the bonds on the retirement date was $350,000. (3) Yas Corporation purchased $500,000 of its bonds at 97 on December 31, 2017, and immediately retired them. The carrying value of the bonds on the retirement date was $490,000. The bonds pay semiannual interest and the interest payment due on December 31, 2017, has been made and recorded (4) Ruwaya Company has $80,000. 10%, 12-year convertible bonds outstanding. These bonds were sold at face value and pay semiannual interest on June 30 and December 31 of each year. The bonds are convertible into 100 shares of Ruwaya S6 par value common stock for each $1,000 par value bond. On December 31, 2019, after the bond interest has been paid, $30,000 par value of bonds were converted. The market value of Ruwaya's common stock was $10 per share on December 31, 2019 Instructions For each of the independent situations, prepare journal entries to record the necessary transactions

Answer 1

Date # Journal Entries In the Books of Devar Company Particulars $ Amount (Dr.) $ Amount (Cr.) Dr. Bank A/c 2,500,000 Cr. Sales A/C 2,500,000 (Being 2,500 exercise machines were sold at an average price of $1000.) Dr. Repair and Maintanance A/C 12,000 Cr. Bank A/c (60 * $200) 12,000 (Being 60 machines were repaired under warranty at an average price of $80 for labor and $ 120 for parts of each unit.) #

(4) Date # Journal Entries In the Books of Ruwaya Company Particulars $ Amount (Dr.) $ Amount (Cr.) Dr. Interest Expenses A/C 4000 ($80,000* 10*6/12) Cr. Cash A/C 4000 (Being Interest payable semiannually) Dr.10% Convertible bond A/C 30,000 Cr. Share Capital [(80,000*100/1000)*6] 18000 Cr. Securities premium 12000 (30,000 Convertible bonds converted into 3000 shares) No Interest in (2) and (3) because was retired immediately.