P10-9A Wempe Co. sold
$3,367,000, 8%, 10-year bonds on January 1, 2014. The bonds were
dated January 1, 2014, and pay interest on January 1. The company uses
straight-line amortization on bond premiums and discounts. Financial statements
are prepared annually.
Prepare the journal entries to record the issuance
of the bonds assuming they sold at: (1) 105 and (2) 96. (Credit account titles are automatically indented when amount
is entered. Do not indent manually.)
|
No.
|
Date
|
Account
Titles and Explanation
|
Debit
|
Credit
|
|
1.
|
1/1/14
|
|||
|
2.
|
1/1/14
|
|||
Prepare amortization tables for issuance of the
bonds sold at 105 for the first three interest payments.
|
Annual
Interest Periods |
Interest to
Be Paid |
Interest Expense
to Be Recorded |
Premium
Amortization |
Unamortized
Premium |
Bond
Carrying Value |
|||||
|
Issue date
|
||||||||||
|
1
|
||||||||||
|
2
|
||||||||||
|
3
|
Prepare
amortization tables for issuance of the bonds sold at 96 for the
first three interest payments.
|
Annual
Interest Periods |
Interest to
Be Paid |
Interest Expense
to Be Recorded |
Premium
Amortization |
Unamortized
Premium |
Bond
Carrying Value |
|||||
|
Issue date
|
||||||||||
|
1
|
||||||||||
|
2
|
||||||||||
|
3
|
Prepare the journal entries to record interest
expense for 2014 under both of the bond issuances assuming they sold at:
(1) 105 and (2) 96. (Credit account
titles are automatically indented when amount is entered. Do not indent
manually.)
|
No.
|
Date
|
Account
Titles and Explanation
|
Debit
|
Credit
|
|
1.
|
12/31/14
|
|||
|
2.
|
12/31/14
|
|||
Show the
long-term liabilities balance sheet presentation for issuance of the bonds sold
at 105 at December 31, 2014.
|
WEMPE Co.
Balance Sheet (Partial) December 31, 2014 |
||||||
Show the
long-term liabilities balance sheet presentation for issuance of the bonds sold
at 96 at December 31, 2014.
|
WEMPE Co.
Balance Sheet (Partial) December 31, 2014 |
||||||
SOLUTION PREVIEW
(a)
(1) 1/1/2014 Cash
($3,367,000 X 105%) 3,535,350
Bonds
Payable 3,367,000
Premium
on Bonds Payable
168,350
