Question

In: Accounting

December 30: Byte received a $9,465.00 check from Corporation for merchandise ordered which will be delivered...

December 30: Byte received a $9,465.00 check from Corporation for merchandise ordered which will be delivered in January.
Christian Wolff, Byte's CPA, indicated that the previous bookkeeper was not very good. The CPA prepared a bank reconciliation and discovered that the bookkeeper neglected to record the bond issued on January 1 of this year and neglected the recording of the interest
payment on June 30. Since Byte does not make entries into "closed" periods, record the entries as of December 31.
`
December 31: On January 1, Byte received $193,390.20 when they issued a $180,000.00, 7%, ten-year bond. Interest is to be paid semiannually on June 30 and December 31. The market rate was 6%. This entry was never recorded.
December 31: Check # 5367 was issued on June 30 for the timely interest payment for the bond. Record the entry using the straight-line method. This entry was never recorded.
December 31: Check # 6011 was issued on December 31st for the timely interest payment for the bond. Record the entry using the straight-line method.

record journal entries

Solutions

Expert Solution

Date Account Debit Credit
Dec-30 Cash $        9,465.00
     Unearned Revenue $       9,465.00
Dec-31 Cash $   193,390.20
      Bonds Payable $   180,000.00
      Premium on Bonds Payable $     13,390.20 =193390.2-180000
Dec-31 Interest Expense $      11,930.49 =12600-669.51
Premium on Bonds Payable $            669.51 =13390.2/20
       Cash $     12,600.00 =180000*7%
Dec-31 Interest Expense $      11,930.49 =12600-669.51
Premium on Bonds Payable $            669.51 =13390.2/20
       Cash $     12,600.00 =180000*7%

ekkarill92 answered 1 year ago
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