Accumulated Depreciation-Equipment Accumulated Depreciation-Machinery Allowance

Question

Accumulated Depreciation-Equipment
Accumulated Depreciation-Machinery
Allowance for Doubtful Accounts
Bad Debt Expense
Bond Issue Expense
Bonds Payable
Buildings
Cash
Common Stock
Debt Investments
Depreciation Expense
Discount on Bonds Payable
Discount on Notes Payable
Discount on Notes Receivable
Equipment
Equity Investments
Gain on Disposal of Machinery
Gain on Disposal of Land
Gain on Disposal of Plant Assets
Gain on Redemption of Bonds
Gain on Restructuring of Debt
Gain on Sale of Machinery
Interest Expense
Interest Payable
Interest Receivable
Interest Revenue
Land
Loss on Disposal of Land
Loss on Redemption of Bonds
Machinery
Mortgage Payable
No Entry
Notes Payable
Notes Receivable
Paid-in Capital in Excess of Par - Common Stock
Paid-in Capital in Excess of Par - Preferred Stock
Premium on Bonds Payable
Sales Revenue
Unamortized Bond Issue Costs
Unearned Revenue
Unearned Sales Revenue
Unrealized Holding Gain or Loss - Income Problem 14-5 In each of the following independent cases, the company closes its books on December 31 Your answer is partially correct. Try again. Pronghorn Co sells $509,000 of 10% bonds on March 1 2017. The bonds pay interest on September 1 and March 1 The due date of the bonds s september-2022. The ond yield 12%. Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)

Explanation / Answer

Part II

Details on Bonds Repurchased :

Journal Entries:

Part I Date Cash Paid Interest Expense Discount Amortized Carrying Value of Bonds 01-Mar-17                                                   -                             -                             -                 4,80,586 01-Sep-17                                          25,450                  28,835                     3,385               4,83,971 01-Mar-18                                          25,450                  29,038                     3,588               4,87,559 01-Sep-18                                          25,450                  29,254                     3,804               4,91,363 01-Mar-19                                          25,450                  29,482                     4,032               4,95,395 01-Sep-19                                          25,450                  29,724                     4,274               4,99,668 01-Mar-20                                          25,450                  29,980                     4,530               5,04,199 01-Sep-20                                          25,450                  30,252                     4,802               5,09,000 The entry on 1-March-2018 is wrong because of a spelling mistake. Interest is spelt as Intrest. 01-Mar-18 Debit Credit Interest Expense                     9,679 Interest Payable                  16,967 Discount on Bonds Payable                     1,196 Cash                  25,450

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