Swisher Company issued $2,020,000 of bonds on January 1, 2017. Prepare the journ

Question

Swisher Company issued $2,020,000 of bonds on January 1, 2017. Prepare the journal entry to record the issuance of the bonds if they are issued at (1) 100, (2) 99, and (3) 104. Prepare the journal entry to record the redemption of the bonds at maturity, assuming the bonds were issued at 100. Prepare the journal entry to record the redemption of the bonds before maturity at 99. Assume the balance in Premium on Bonds Payable is $9,550. Prepare the journal entry to record the conversion of the bonds into 60,900 shares of $10 par value common stock. Assume the bonds were issued at par.

Explanation / Answer

When Issued @ 100 Bank A/c DR 2020000 Bonds A/c CR. 2020000 When Issued @ 99 Bank A/c DR 1999800 Discount A/c DR 20200 Bonds A/c CR. 2020000 When Issued @ 101 Bank A/c DR 2040200 Bonds A/c CR. 2020000 Premium On Bonds CR. 20200 Redemption of Bonds @99 Bonds A/c DR 2020000 Bank A/c CR. 1999800 Profit on Redemption A/c CR. 20200 Conversion Bonds A/c DR 2020000 Common Stock CR. 609000 Premium On redemption CR. 1411000

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