1.Two independent situations follow: 1. Blossom Corporation redeemed $124,800 face value, 12% bonds on June 30,...

1.Two independent situations follow:

1.		Blossom Corporation redeemed $124,800 face value, 12% bonds on June 30, 2017, at 101. The bonds’ amortized cost at the redemption date was $112,800. The bonds pay annual interest, and the interest payment due on June 30, 2017, has been made and recorded.
2.		Pina Inc. redeemed $144,000 face value, 12.5% bonds on June 30, 2017, at 96. The bonds’ amortized cost at the redemption date was $144,960. The bonds pay annual interest, and the interest payment due on June 30, 2017, has been made and recorded.

For each situation above, prepare the appropriate journal entry for the redemption of the bonds. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

No.	Date	Account Titles and Explanation	Debit	Credit
1.	June 30, 2017


2.	June 30, 2017

Question 6

Splish Brothers Construction Inc. needed financing to buy two Case graders. Splish Brothers receives $236,000 on January 1, 2018, when it issues a 5-year, 5% mortgage note payable. The terms provide for semi-annual instalment payments on June 1 and January 1, with fixed principal amounts.

Calculate the fixed principal amount required each six-month period.

Fixed principal portion

a )Prepare an instalment payment schedule for the first three interest periods. (Round answer to 0 decimal places, e.g. 5,276.)

SPLISH BROTHERS CONSTRUCTION INC. Instalment Payment Schedule - Fixed Principal Payments
Interest Period	Cash Payment	Interest Expense	Reduction of Principal	Principal Balance
july 1, 2018				$
July 1, 2018
Jan. 1, 2019
July 1, 2019

Prepare the journal entries to record the mortgage note payable and the first three instalment payments. Prepare any necessary adjusting journal entries at Splish Brothers's fiscal year end of December 31 for the 2018 year end. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Provide the balance sheet disclosure for the mortgage note payable at December 31, 2018, being specific about the classifications.

SPLISH BROTHERS CONSTRUCTION INC. Balance Sheet (Partial) December 31, 2018

		$


		$

Solutions

Expert Solution

ekkarill92 answered 2 years ago

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