P-2 (Comprehensive Bond
Problem)
(Note: Calculations with financial calculators
or tables might result in slightly different values due to rounding.)
In each of the following independent cases the
company closes its books on December 31.
For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.)
For the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made.)
Instructions: (Round to the nearest dollar.)
1. Sanford Co. Sells $500,000 of 10% bonds on March
1, 2014. The bonds pay interest on September 1 and March 1. The due date of the
bonds is September 1, 2017.
The bonds yield 12% Give the entries through
December 31, 2015.
2. Titania Co. Sells $400,000 of 12% bonds on
June 1, 2014. The bonds pay interest on December 1 and June 1. The due date of
the bonds is June 1, 2018. The bonds yield 10% On October 1, 2015, Titania buys
back $120,000 worth of the bonds for $126,000 (includes accrued interest). Give
the entries through December 31, 2016.
TUTORIAL
PREVIEW
|
Mar 1, 14
|
Cash
|
472,088
|
|
|
Discount on Bonds
Payable
|
27,912
|
|
|
|
Bonds Payable
|
|
500,000
|
File name: P-2 Comprehensive
Bond Problem.xlsx File type: .xlsx PRICE: $15
