(a)
Journalize the entry for the issuance of bonds in the books of C Entertainment.
(b)
Record the journal entry for the initial deposit to the bond sinking fund.
(c)
Journalize the entry for the semiannual interest payment in the books of C Entertainment.
(d)
Record the journal entry for the first year’s sinking fund earnings.
(e)
Journalize the entry for the year-end adjustment in the books of C Entertainment.
(f)
Journalize the entry to reverse the year-end adjustment in the books of C Entertainment.
(g)
Journalize the entry for the semiannual interest payment in the books of C Entertainment.
(h)
Record the journal entry for the deposit to bond sinking fund.
(i)
Record the journal entry for the redemption of the bonds.
(j)
Record the journal entry for the return of excess cash in the sinking fund to the corporation.
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College Accounting, Chapters 1-27
- BONDS ISSUED AT FACE VALUE WITH SINKING FUND Creswell Entertainment issued the following bonds: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Deposit to sinking fund on June 1. (c) Interest payment on the bonds on September 30, 20-1. (d) Earnings of 3,000 on the sinking fund in 20-1. (e) Year-end adjustment on the bonds for 20-1. (f) Reversing entry for the beginning of 20-2. (g) Interest payments on the bonds on March 31, 20-2. (h) Deposit to sinking fund on June 1, 20-2. (i) Redemption at maturity from the sinking fund. (j) Return of excess cash of 1,900 from the sinking fund to the corporation.arrow_forwardEdward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1, 2018 and received $480,000. Interest is payable semiannually. The discount is amortized using the straight-line method. Prepare journal entries for the following transactions. A. July 1, 2018: entry to record issuing the bonds B. Dec. 31, 2018: entry to record payment of interest to bondholders C. Dec. 31, 2018: entry to record amortization of discountarrow_forwardBONDS ISSUED AT FACE VALUE WITH SINKING FUND Martin Manufacturing issued the following bonds: REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Deposit to sinking fund on June 1. (c) Interest payment on the bonds on September 30, 20-1. (d) Earnings of 2,400 on the sinking fund in 20-1. (e) Year-end adjustment on the bonds for 20-1. (f) Reversing entry for the beginning of 20-2. (g) Interest payment on the bonds on March 31, 20-2. (h) Deposit to sinking fund on June 1, 20-2. (i) Redemption at maturity from the sinking fund. (j) Return of excess cash of 1,050 from the sinking fund to the corporation.arrow_forward
- Required information {The following information applies to the questions displayed below.] The Square Foot Grill, Incorporated issued $350,000 of 10-year, 7 percent bonds on July 1, Year 1, at 102. Interest is payable in cash semiannually on June 30 and December 31. The straight-line method is used for amortization. equired . Prepare the journal entries to record issuing the bonds and any necessary journal entries for Year 1 and Year 2. Post the journal ntries to T-accounts. Prepare any necessary closing entries for Year 1.arrow_forwardOn the first day of the current fiscal year, $1,500,000 of 8%, 10-year bonds, with interest payable semiannually, were issued for $1,225,000. Journalize the following transactions for the current fiscal year: Question Content Area a. Issuance of the bonds. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - - Select - - Select - Question Content Area b. First semiannual interest payment (record as a separate entry from discount amortization). If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select - Question Content Area c. Amortization of bond discount for the year, using the straight-line method of amortization. If an amount box does not require an entry, leave it blank. - Select - - Select - - Select - - Select -arrow_forwardOn January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Cash Effective Increase in Outstanding Payment Payment Interest Balance Balance 5,802,315 1 332,000 348,139 16,139 5,818,454 2 332,000 349,107 17,107 5,835,561 3 332,000 350,134 18,134…arrow_forward
- On January 1, 2021, Tennessee Harvester Corporation issued debenture bonds that pay interest semiannually on June 30 and December 31. Portions of the bond amortization schedule appear below: Payment CashPayment EffectiveInterest Increase inBalance OutstandingBalance 6,047,387 1 292,000 302,369 10,369 6,057,756 2 292,000 302,888 10,888 6,068,644 3 292,000 303,432 11,432 6,080,076 4 292,000 304,004 12,004 6,092,080 5 292,000 304,604 12,604 6,104,684 6 292,000 305,234 13,234 6,117,918 ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ 38 292,000 355,060 63,060 7,164,267 39 292,000 358,213 66,213 7,230,480 40 292,000 361,520 69,520 7,300,000 Required:1. What is the face amount of the bonds?2. What is the initial selling price of the bonds?3. What is the term to maturity in years?4. Interest is determined by what approach?5.…arrow_forwardOn January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $850,000, 8%, 10-year bond that pays semiannual interest of $34,000 ($850,000 × 8% × ½ year), receiving cash of $850,000.(a) Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry(b) Journalize the entry to record the first interest payment on June 30. If an amount box does not require an entry(c) Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entryarrow_forwardOn January 1, Year 1, Price Company issued $190,000 of five-year, 6 percent bonds at 96 12. Interest is payable annually on December 31. The discount is amortized using the straight-line method. Required Prepare the journal entries to record the bond transactions for Year 1 and Year 2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list Journal entry worksheet > 1 2 3 Record the entry for issuance of bonds. Note: Enter debits before credits. >arrow_forward
- The first day of the fiscal year, a company issues a $700,000, 6%, 10-year bond that pays semiannual interest of $21,000 ($700,000 × 6% × ½ year), receiving cash of $700,000. Question Content Area a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash Cash Bonds Payable Bonds Payable Feedback Area Feedback Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Question Content Area b. Journalize the entry to record the first interest payment. If an amount box does not require an entry, leave it blank. Interest Expense Interest Expense Cash Cash Feedback Area Feedback The interest payment is calculated using the following formula: Principle x Interest Rate x Time. Question Content Area c. Journalize the entry to record the payment of…arrow_forwardJournalize the entries to record the following: If an amount box does not require an entry, leave it blank. a. The initial acquisition of the bonds on May 1. May 1 b. The semiannual interest received on November 1. Nov. 1 c. The sale of the bonds on November 1. Nov. 1 d. The accrual of $1,360 interest on December 31. Dec. 31arrow_forwardeBook Reporting Issuance and Retirement of Long-Term Debt On the basis of the details of the following bonds payable and related discount accounts, indicate the items to be reported in the Financing Activities section of the statement of cash flows, assuming no gain or loss on retiring the bonds: ACCOUNT Bonds Payable Jan. Date June Item Debit 1980 Retire bonds 76,000 Jan. Item Date 30 ACCOUNT Discount on Bonds Payable 1 June 30 Dec. 31 2 Issue bonds Retire bonds Balance Issue bonds Print Item Item Balance Retire bonds Issue bonds Amortize discount Amortization of discount Debit Check My Work 2 more Check My Work uses remaining. 15,300 Credit 228,000 Credit 6,080 1,320 ACCOUNT NO. Debit Section of Statement of Cash Flows Balance Debit Credit ACCOUNT NO. 380,000 304,000 532,000 Balance 17,100 11,020 26,320 25,000 Credit Added or Deducted $ Amount Previous Nextarrow_forward
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