Question
In: Accounting
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The bonds were dated January 1, 2019 and mature in four years on January 1, 2023. The bonds pay interest semi-annually each June 30th and December 31st. At the time of issuance, the market rate of interest for similarly risky investments was 6%.
1. At what amount were the bonds issued on January 1, 2019?
2. Prepare an amortization schedule for the life of the bonds using the effective interest method of amortization.
3. Assuming Gleason Corp.’s fiscal year ends May 31st, prepare all necessary entries written during the calendar year 2019 (i.e. from January 1, 2019 through December 31, 2019) related to the bonds.
4. Gleason retired 25% of the bonds on January 1, 2021. Prepare the entry for the retirement, assuming the bonds were retired at 102.
Check figures Q1, Issue Price: $749,138 Q4, Gain on Bond Retirement: $ 3,005
please show work, thank you!!
Solutions
ekkarill92 answered 2 years agoRelated Solutions
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds
payable to finance company expansion. The bonds were dated January
1, 2019 and mature in four years on January 1, 2023. The bonds pay
interest semi-annually each June 30th and December 31st. At the
time of issuance, the market rate of interest for similarly risky
investments was 6%. Requirements:
At what amount were the bonds issued on January 1, 2019?
Assuming Gleason Corp.’s fiscal year ends May 31st, prepare all...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds payable to finance company expansion. The...
On January 1, 2019, Gleason Corp. issued $700,000, 8% bonds
payable to finance company expansion. The bonds were dated January
1, 2019 and mature in four years on January 1, 2023. The bonds pay
interest semi-annually each June 30th and December 31st. At the
time of issuance, the market rate of interest for similarly risky
investments was 6%.
1. At what amount were the bonds issued on January 1, 2019?
2. Prepare an amortization schedule for the life of the...
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