Question

In: Accounting

Acheron Industries’ fiscal year ends on December 31st. Wages earned from Dec 1 – Dec 31, 2024 totaled $836,000

 

Question 3

Acheron Industries’ fiscal year ends on December 31st. Wages earned from Dec 1 – Dec 31, 2024 totaled $836,000. Wages of $35,000 that were earned between December 15th and December 31st will not be paid until after the first of the year.

Record the journal entry on December 31, 2024.  

Question 4

On October 1, 2024, Tasmanian Traders was paid $217,000 cash for 700 hours of service to be completed within the next 9 months. On December 31, 2024, the cargo company had fulfilled 483 of the required hours.

Record the adjusting entry on December 31, 2024.

Question 9

On January 1, 2024, Diamond Tech issued 10,000 bonds, each with a face value of $1,000, for 98.2911. The company received cash from the sale of the bonds.

Record the complete journal entry from the sale of the bonds below.

Question 10

On January 1, 2024, Fabrikam Labs issued 1,000 bonds, each with a face value of $1,000, for 102.7323. The stated interest is 3.8%, and the market rate at the time the bonds were issued was 3.2%. The bonds are due on January 1, 2029 (5 year term) with interest payments due annually every January 1st. The company received cash from the sale of the bonds.

Record the complete journal entry for the sale of the bonds below.

 

Solutions

Expert Solution

Date Description Debit Credit
3 2024
31-Dec Wages expense 836000
Wages payable 35000 WN- for journal 9
Cash 801000 Issue rate= 98.2911%
4 31-Dec Cash 217000 Face value=$1,000
Unearned revenue 217000 Issue price Face value x Issue rate
cash is received but work is not yet done so revenue is not accrued and it is unearned revenue $1,000 x 98.2911%
31-Dec Unearned revenue 149,730 $982.91
Revenue 149,730 No of bonds issued 10,000
483 hours done so the revenue needs to be accrued =(483/700)*217000=149730 Sale proceeds of the bonds No of bonds issued x Issue price
9 1/1/2024 Recording of Bonds at discount of 98.2911 10,000 x 982.91
Cash 9829100 $9,829,100
Discount on Bonds payable 170900 Face value of 10,000 bonds No of bonds issued x Face value
Bonds payable 10,000,000 10,000 x $1,000
10 1/1/2024 Cash 1027323 $   10,000,000
Bonds Payable 1000000 If Issue price < than face value then bond is trading at discount
Premium on Bonds Payable 27323 Discount on bond Face value of the bonds- Sale proceeds of the bonds
$10,000,000-$9,829100
$170,900
WN- For journal 10
Interest Payment 3.8% Interest expense 3.2% of Carrying Value Premium Amortized Carrying Value of bond
1-Jan-24 0 0 1027323
1-Jan-25 38000 32874 5126 1022197
1-Jan-26 38000 32710 5290 1016908
1-Jan-27 38000 32541 5459 1011449
1-Jan-28 38000 32366 5634 1005815
1-Jan-29 38000 32186 5814 1000001

ekkarill92 answered 2 years ago
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