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Financial & Managerial Acct Terms 1 & 2- BV F09 / Problem 15-2A

P15-2A

Kusmaul Electric sold $500,000, 10%, 10-year bonds on January 1, 2008. The bonds were dated January 1 and paid interest on January 1 and July 1. The bonds were sold at 104.
Prepare the journal entry to record the issuance of the bonds on January 1, 2008. (List multiple debit/credit entries in descending order of amount.)

DateDescription/AccountDebitCredit
Jan. 1 
        
        

At December 31, 2008, the balance in the Premium on Bonds Payable account is $18,000. Show the balance sheet presentation of accrued interest and the bond liability at December 31, 2008.

Current liabilities  
      $
   
Long-term liabilities  
     $ 
     Add:

$

On January 1, 2010, when the carrying value of the bonds was $516,000, the company redeemed the bonds at 105. Record the redemption of the bonds assuming that interest for the period has already been paid. (List multiple debit/credit entries in descending order of amount.)

DateDescription/AccountDebitCredit
Jan. 1 
  
  
        

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