College Accounting, Chapters 1-27
23rd Edition
ISBN: 9781337794756
Author: HEINTZ, James A.
Publisher: Cengage Learning,
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Chapter 22, Problem 5SEB
(a)
To determine
Journalize the redemption of $50,000 bonds of the issue at 95, if the unamortized premium is $500.
(b)
To determine
Journalize the redemption of $75,000 bonds of the issue at 103, if the unamortized premium is $750.
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On January 1, 2020, Henderson Corporation redeemed $500,000 of bonds at 99. At the time of redemption, the unamortized premium was $15,000. Prepare the corporation's journal entry to record the reacquisition of the bonds.
R & B Inc. issued $500,000, 10-year bonds at a premium. Prior to maturity, when the carrying value of the bonds is $508,000, the company retires the bonds at 102. Prepare the entry to record the redemption of the bonds.
On January 1, $925,000, 5-year, 10% bonds, were issued for $897,250. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, the semiannual amortization amount is
a.$27,750
b.$5,550
c.$46,250
d.$2,775
Chapter 22 Solutions
College Accounting, Chapters 1-27
Ch. 22 - A secured bond is one that is backed by specific...Ch. 22 - Prob. 2TFCh. 22 - When bonds are issued at face value, the debit to...Ch. 22 - Prob. 4TFCh. 22 - Prob. 5TFCh. 22 - Bonds that give the holder the option of...Ch. 22 - Prob. 2MCCh. 22 - Prob. 3MCCh. 22 - Prob. 4MCCh. 22 - Bond sinking fund earnings are (a) subtracted from...
Ch. 22 - Prob. 1CECh. 22 - Prob. 2CECh. 22 - Prob. 3CECh. 22 - Prob. 4CECh. 22 - Prob. 5CECh. 22 - Prob. 1RQCh. 22 - Prob. 2RQCh. 22 - Prob. 3RQCh. 22 - Prob. 4RQCh. 22 - What accounts are affected when bonds are issued...Ch. 22 - Prob. 6RQCh. 22 - Prob. 7RQCh. 22 - Prob. 8RQCh. 22 - Prob. 9RQCh. 22 - When bonds are redeemed before maturity, how is...Ch. 22 - Prob. 11RQCh. 22 - How should sinking fund earnings be reported on...Ch. 22 - Prob. 13RQCh. 22 - Prob. 1SEACh. 22 - Prob. 2SEACh. 22 - Prob. 3SEACh. 22 - REDEMPTION OF BONDS ISSUED AT FACE VALUE Levesque...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A PREMIUM Brighton...Ch. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT...Ch. 22 - BOND SINKING FUNDS M. J. Adams Corporation pays...Ch. 22 - BONDS ISSUED AT FACE VALUE Ito Co. issued the...Ch. 22 - Prob. 9SPACh. 22 - Prob. 10SPACh. 22 - Prob. 11SPACh. 22 - Prob. 12SPACh. 22 - Prob. 13SPACh. 22 - Prob. 1SEBCh. 22 - Prob. 2SEBCh. 22 - Prob. 3SEBCh. 22 - Prob. 4SEBCh. 22 - Prob. 5SEBCh. 22 - REDEMPTION OF BONDS ISSUED AT A DISCOUNT Medina...Ch. 22 - Prob. 7SEBCh. 22 - BONDS ISSUED AT FACE VALUE Ramona Arroyo Co....Ch. 22 - Prob. 9SPBCh. 22 - Prob. 10SPBCh. 22 - Prob. 11SPBCh. 22 - BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN...Ch. 22 - Prob. 13SPBCh. 22 - MANAGING YOUR WRITING The business where you work...Ch. 22 - Prob. 1ECCh. 22 - MASTERY PROBLEM Jackson, Inc.s fiscal year ends...Ch. 22 - CHALLENGE PROBLEM This problem challenges you to...
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- REDEMPTION OF BONDS ISSUED AT A PREMIUM Brighton Unlimited sold bonds at a premium for 630,000 (premium of 30,000) eight years ago. (a) The corporation redeems 60,000 of this issue at 98. The unamortized premium is 600. (b) The corporation redeems 90,000 of this issue at 102. The unamortized premium is 900. Prepare journal entries to record the redemption in (a) and (b).arrow_forwardREDEMPTION OF BONDS ISSUED AT A DISCOUNT Medina Optical Supply sold bonds at a discount for 420,000 (discount of 20,000) eight years ago. (a) The corporation redeems 25,000 of this issue at 94. The unamortized discount is 250. (b) The corporation redeems 30,000 of this issue at 101. The unamortized discount is 300. Prepare journal entries to record the redemption in (a) and (b).arrow_forwardREDEMPTION OF BONDS ISSUED AT A DISCOUNT Mutschelknaus Manufacturing sold bonds at a discount for 290,000 (discount of 10,000) seven years ago. (a) The corporation redeems 25,000 of this issue at 97. The unamortized discount is 350. (b) The corporation redeems 30,000 of this issue at 99. The unamortized discount is 450. Prepare journal entries to record the redemption in (a) and (b).arrow_forward
- REDEMPTION OF BONDS ISSUED AT FACE VALUE Levesque Lumber Co. issued 800,000 in bonds at face value 10 years ago and has paid semiannual interest payments through the years. (a) Assume the bonds are redeemed at face value. (b) Assume that 80,000 of the bonds are redeemed at 104. (c) Assume that 80,000 of the bonds are redeemed at 96. Prepare journal entries to record (a), (b), and (c).arrow_forwardEli Inc. issued $100,000 of 8% annual, 5-year bonds for $103,000. What is the total amount of interest expense over the life of the bonds?arrow_forwardRobin Corporation retires its $800000 face value bonds at 104 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $829960. The entry to record the redemption will include a credit of $32040 to Premium on Bonds Payable. O debit of $32000 to Premium on Bonds Payable. O credit of $2040 to Loss on Bond Redemption. O debit of $2040 to Loss on Bond Redemption.arrow_forward
- On January 1, $834,000, 5-year, 10% bonds, were issued for $808,980. Interest is paid semiannually on January 1 and July 1. If the issuing corporation uses the straight-line method to amortize discount on bonds payable, what is the semiannual amortization amount? Select the correct answer. $5,004 $2,502 $41,700 O $25,020arrow_forwardOn January 1, Year 1, Twain Corporation sold $620,000 of its own 5 percent, 10-year bonds. Interest is payable annually on December 31. The bonds were sold to yield an effective interest rate of 6 percent. Twain uses the effective interest rate method. The bonds sold for $574,368. Requireda. Prepare the journal entry for the issuance of the bonds.b. Prepare the journal entry for the amortization of the bond discount and the payment of the interest at December 31, Year 1. (Assume effective interest amortization.)c. Prepare the journal entry for the amortization of the bond discount and the payment of interest on December 31, Year 1. (Assume straight-line amortization.)d. Calculate the amount of interest expense for Year 2. (Assume effective interest amortization.) e. Calculate the amount of interest expense for Year 2. (Assume straight-line amortization.)arrow_forwardSarasota Corp. retires its $928000 face value bonds at 105 on January 1, following the payment of annual interest. The carrying value of the bonds at the redemption date is $962750. The entry to record the redemption will include a debit of $34750 to Premium on Bonds Payable. credit of $11650 to Gain on Bond Redemption. credit of $34750 to Loss on Bond Redemption. debit of $46400 to Premium on Bonds Payable.arrow_forward
- A corporation sold $500,000, 5-year, 6% bonds on January 1 for $465,000. Interest is to be paid annually on January 1. If the issuing corporation uses the straight-line method to amortize discounts and premiums on bonds payable, the amount of bond interest expense to be recognized in the year issued is $50,000. $30,000. $23,000. O $37,000. O $46,500. Nextarrow_forwardOn January 1, 2020, Whispering Corporation redeemed $510,000 of bonds at 98. At the time of redemption, the unamortized premium was $15,300.Prepare the corporation’s journal entry to record the reacquisition of the bondsarrow_forwardMay 1 and November 1. On November 1, Demopoulos Company sold $55,800 of the bonds for 98. Journalize 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 $1,316 interest on December 31. Dec. 31arrow_forward
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