Swisher Company issued $1,830,000 of bonds on January 1, 2017. BACK NEXT Prepare

Question

Swisher Company issued $1,830,000 of bonds on January 1, 2017. BACK NEXT Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 97, and (3) 105. (Credit account titles are automatically indented when amount is entered. Do not indent manually. No. Account Titles and Explanation Debit Credit Prepare the journal entry to record the redemption of the bonds at maturity, assuming the bonds were issued at 100. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Debit Credit Account Titles and Exolanation Inc. All Rights Reserved. A Division of 11:19 AM

Explanation / Answer

S.No. Accounts title and Explanations Debit ($) Credit ($) A.1. Cash 18,30,000 Bonds Payable 18,30,000 (To record issuance of bonds at 100) 2 Cash ($1830000*97%) 17,75,100 Bond Discount 54,900 Bonds Payable 18,30,000 (To record issuance of bonds at 97) 3 Cash ($1,830000*105%) 19,21,500 Bonds Payable 18,30,000 Premium on Bonds Payable 91,500 (To record issuance of bonds at 105) B. Bonds Payable 18,30,000 Cash 18,30,000 (To record Redemption of bonds at maturity) C. Bonds payable 18,30,000 Premium on bonds payable 9,100 Cash ($1,830,000*97%) 17,75,100 Gain on Bonds redemption 64,000 (To record Redemption of bonds before maturity at 97) D. Bonds Payable 18,30,000 Common Stock (56500 *$10) 5,65,000   Paid-in-Capital in Excess of Par 12,65,000 (To record conversion of bonds into common stock)

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