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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