Entries for Issuing and Calling Bonds; Loss Adele Corp., a wholesaler of music e
ID: 2336478 • Letter: E
Question
Entries for Issuing and Calling Bonds; Loss
Adele Corp., a wholesaler of music equipment, issued $4,910,000 of 10-year, 10% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.
Journalize the entries to record the above selected transactions.
Issued the bonds for cash at their face amount.
20Y1 Mar. 1 Issued the bonds for cash at their face amount. Sept. 1 Paid the interest on the bonds. 20Y5 Sept. 1 Called the bond issue at 103, the rate provided in the bond indenture. (Omit entry for payment of interest.)Explanation / Answer
Date General Journal Debit Credit 20Y1 Mar. 1 Cash 4910000 Bonds payable 4910000 (To record issuance of bonds) Sept. 1 Interest expense 245500 Cash (10% x $4910000 x 1/2) 245500 (To record interest paid on bonds) 20Y5 Sept. 1 Bonds payable 4910000 Loss on retirement of bonds 147300 Cash ($4910000 x 103/100) 5057300 (To record retirement of bonds)
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.