Presented below are selected transactions on the books of Simonson Corporation.
ID: 2499434 • Letter: P
Question
Presented below are selected transactions on the books of Simonson Corporation.
Prepare journal entries for the transactions above. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
May 1, 2014
Dec. 31, 2014
(To record the interest)
(To amortize the premium)
Jan. 1, 2015
Apr. 1, 2015
Dec. 31, 2015
(To record the interest)
(To amortize the premium)
May 1, 2014 Bonds payable with a par value of $988,800, which are dated January 1, 2014, are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 10% (payable annually at January 1), and mature January 1, 2024. (Use interest expense account for accrued interest.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. (Use straight-line amortization.) Jan. 1, 2015 Interest on the bonds is paid. April 1 Bonds with par value of $374,800 are called at 103 plus accrued interest, and redeemed. (Bond premium is to be amortized only at the end of each year.) Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.Explanation / Answer
Date
Date
Accounts title Dr.$ Cr.$ 1/5/2014 Cash 1,048,128.00 Bonds payable 988,800.00 Premium on bonds payable 59,328.00 31-12-14 Interest expense 92,947.20 Premium on bonds payable 5,932.80 Interest payable 98,880 To record the interest accrued on the bonds 1/1/2015 Interest payable 98,800 Cash 98,800 To record the payment of interest 1/4/2015 Bonds payable 374,800.00 Interest accrued 12493.33333 Loss on redemption of bonds 1249.33 Cash 386044 To record the redemption of bonds 31-12-2015 Interest Expense 55467.2 Premium on bonds payable 5932.8 Interest payable 61400Related Questions
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