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Dillon Corp. authorized $190,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98. Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $95,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year b. Jan. 1, Year 6 c. Jan. 1, Year 6 Account Name To record the issuance of bonds, To record the issuance of bonds. To record the redemption of bonds. V V V V V V V Dr. 0 0 0 0 0 0 0 0 0 Cr. 0 0 0 0 0 0 0 0 0

Dillon Corp. authorized $190,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98. Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $95,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year b. Jan. 1, Year 6 c. Jan. 1, Year 6 Account Name To record the issuance of bonds, To record the issuance of bonds. To record the redemption of bonds. V V V V V V V Dr. 0 0 0 0 0 0 0 0 0 Cr. 0 0 0 0 0 0 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dillon Corp. authorized $190,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98. Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $95,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year 1 b. Jan. 1, Year 6 c. Jan. 1, Year 6 Account Name To record the issuance of bonds. To record the issuance of bonds. To record the redemption of bonds. くくくくく くくくく Dr. 0 OOO 0 0 0 0 O O O O 0 Cr. 0 0 0 0 0 O O O 0 0 0 0
Transcribed Image Text:Dillon Corp. authorized $190,000 of 6% (cash payable each December 31), 10-year bonds on January 1 of Year 1. The bonds are callable at any point after Year 5 at 103. The bonds sold on January 1 of Year 1 at 98. Straight-line amortization of bond discounts and premiums is used. Due to a drop in interest rates, Dillon decided to call in half of the bonds and issue a new series of bonds at par in the amount of $95,000 (5% cash interest annually, five-year term) on January 1 of Year 6. a. Provide the entry for issuance of the 6% bonds on January 1 of Year 1. b. Provide the entry for issuance of the 5% bonds on January 1 of Year 6. c. Provide the entry for redemption of one-half of the 6% bonds on January 1 of Year 6. Date a. Jan. 1, Year 1 b. Jan. 1, Year 6 c. Jan. 1, Year 6 Account Name To record the issuance of bonds. To record the issuance of bonds. To record the redemption of bonds. くくくくく くくくく Dr. 0 OOO 0 0 0 0 O O O O 0 Cr. 0 0 0 0 0 O O O 0 0 0 0
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