Question

Crane Company sold $5,900,000, 7%, 15-year bonds on January 1, 2022. The bonds were dated January 1, 2022, and pay interest on December 31. The bonds were sold at 98.

Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

  

  

At December 31, 2022, $8,000 of the bond discount had been amortized. Show the long-term liability balance sheet presentation of the bond liability at December 31, 2022.

CRANE COMPANY Balance Sheet (Partial) choose the accounting period                                                                      For the Month Ended December 31, 2022December 31, 2022For the Year Ended December 31, 2022
select an opening subsection name                                                                      Current AssetsCurrent LiabilitiesIntangible AssetsLong-term InvestmentsLong-term LiabilitiesProperty, Plant and EquipmentStockholders' EquityTotal AssetsTotal Current AssetsTotal Current LiabilitiesTotal Intangible AssetsTotal LiabilitiesTotal Liabilities and Stockholders' EquityTotal Long-term InvestmentsTotal Long-term LiabilitiesTotal Property, Plant and EquipmentTotal Stockholders' Equity
enter a balance sheet item			$enter a dollar amount
select between addition and deduction                                                                      AddLess: enter a balance sheet item			enter a dollar amount		$enter a total of the two previous amounts

eTextbook and Media

List of Accounts

  

  

At January 1, 2024, when the carrying value of the bonds was $5,782,000, the company redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the year had already been paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on January 1	enter a debit amount	enter a credit amount

Answer 1

Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Cash (5900000*.98)	5782000
	Discount on bonds payable	118000
	Bonds payable		5900000

  

At December 31, 2022, $8,000 of the bond discount had been amortized. Show the long-term liability balance sheet presentation of the bond liability at December 31, 2022.

CRANE COMPANY Balance Sheet (Partial) December 31, 2022
Long term liabilities
Bonds payable			5900000
Less: Discount on bonds payable			-110000		5790000

  

At January 1, 2024, when the carrying value of the bonds was $5,782,000, the company redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the year had already been paid. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	Bonds payable	5900000
	Loss on bond redemption	236000
	Discount on bonds payable		118000
	Cash (5900000*1.02)		6018000