anis version 1 Course. ACCOUNTING \" (ACC 12) ame: 1) On 1/1/2017, Air Inc. purc
ID: 2430329 • Letter: A
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anis version 1 Course. ACCOUNTING " (ACC 12) ame: 1) On 1/1/2017, Air Inc. purchased a plant for $350,000 by agrecing to pay $122.500 upfront in cash and signing a 30-year mortgage for the difference $227,500, taken ou 5% interest that is payable in $1,100 monthly paymients which includes principal and interest beginning on 1/1/2017. Record the issuing of the mortgage on 1/1/2017 and the first two monthly payments entries (include the table to obtain partial credit) t at 2) K-Tow Corporation issued a $2 Million, 15 years, 4% semiannual bond on January 1, bonds market rate is 6% given that we are using the effective interest method. 2017, The Record the bond issuance entry as well as the first two semiannual table to get partial credit) payments. (include the Lo-Down Corporation issued a $4 Million, 20 year, 10% semiannual bond or January 1, 2017, Assume the market rate is 5% given that we are using the straight line interest method. Record the bond issuance entry as well as the first two semiannual payments. 3) (include the table to get partial credit) Extra Credit: 4) Niebuhr Company issued $500,000 of bonds on January 1, 2017. (a) Prepare the journal entry to record the retirement of the bonds at maturity, assuming the bonds were issued at 100. (b) Prepare the journal entry to record the retirement of the bonds before maturity at 97. Assume the balance in Premium on Bonds Payable is $5,000. (c) Prepare the journal entry to record the retirement of the bonds before maturity at 105. Assume the balance in Premium on Bonds Payable is $5,000. 100 o00POn (h 12Explanation / Answer
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Journal Entries Date Particulars Debit Credit 1-Jan-17 Plant Dr $350,000.00 To Cash $122,500.00 To Mortgage payable $227,500.00 (To record purchase of plant and issue mortgage) 31-Jan-17 Interest expense Dr ($227,500 * 5%/12) $947.92 Mortgage payable Dr $52.08 To Cash $1,000.00 (To record mortgage installment payment) 28-Feb-17 Interest expense Dr ($227,500 - $52.08 * 5%/12) $947.70 Mortgage payable Dr $52.30 To Cash $1,000.00 (To record mortgage installment payment)Related Questions
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