Dupre Corp. which operates on a calendar year basis, issued a bond with a face v

Question

Dupre Corp. which operates on a calendar year basis, issued a bond with a face value of $ 4,000,000 on April 1, 2015, The bond has a stated rated of 8% and it will mature on march 2015 Present the journal entries to record the following: On January 1.2015 Joey and Amy formed a partnership called Buttafuoco Assoefo, v partnership agreement provides for the division of net income as follow: Interest on average capital balances for the year. 10% Salary allowances: Joey 560.000. .Amy $20,000 Reminder equally. You olio discover the following: 2015 net income was 5100.000 Joey's average capital was 5400.000 while Amy's average capital for 2015 was $ 5600.000 Prepare a schedule for the division of income.

Explanation / Answer

Date Account Tiltles and Explanation Debit ($) Credit ($) April 1, 2015 Cash / Bank a/c …………………Dr      40,00,000                    To 8% Bond a/c          40,00,000 (Being issue of 8% bond) Sep 30, 2015 Interest expenses a/c ………………Dr        1,60,000                  To Cash / Bank a/c            1,60,000 (Being interest paid for 6 months - 4,000,000*8%*6/12) Dec 31, 2015 Interest expenses a/c ………………Dr            80,000                  To Accrued interest a/c                80,000 (Being interest for 3 months - 4,000,000*8%*3/12) Shedule of diversion of income Total $ Joey $ Amy $ a) Net Income (1:1)        1,00,000                50,000                50,000 b) Salary allowance            80,000                60,000                20,000 c) Interest on capital @ 10%        1,00,000                40,000                60,000 400,000*10% 600,000*10% Total        2,80,000            1,50,000            1,30,000

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.