Question

In: Accounting

On 31 December 20X7, a company has the following bond on the statement of financial position:...

On 31 December 20X7, a company has the following bond on the statement of financial position:

  Bond payable, 7%, interest due semi-annually on 31 Dec.
        and 30 June; maturity date, 30 June 20X11

$ 8,200,000    
  Premium on bonds payable 68,880    
$ 8,268,880    

On 28 February 20X8, 20% of the bond was retired for $1,804,000 plus accrued interest to 28 February. Interest was paid on this date only for the portion of the bonds that were retired. Premium amortization was recorded on this date in the amount of $660, representing amortization on the retired debt only.

Required:

Provide the entries to record the bond interest on 28 February and the bond retirement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.)

- Record the entry to update interest expense and amortization.

- Record the entry to retire bonds.

Solutions

Expert Solution


Related Solutions

v The statement of financial position on December 31, 2011, and 2012 for Majan Manufacturing Company...
v The statement of financial position on December 31, 2011, and 2012 for Majan Manufacturing Company includes the liabilities listed below:    2011 On September 15th, 2011, Majan company purchased Inventory from a supplier on credit for $250,000. On October 1st, 2011, Majan borrowed 12 million cash and issued nine months, 12% promissory note. Interest was payable at maturity. On November 1, 2011, Majan rented a portion of its factory to a tenant for $15,000 per year, payable in advance....
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                    
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                                                              Liabilities Cash                                      $259,000           Notes Payable 8%             $60,000 Inventory                                $6,000           Accounts Payable              $40,000 Prepaid Insurance                $3,000                      Total                                  $100,000 Supplies                                  $4,000           Common Stock $5 par   $140,000 Land                                       $6,000           Excess of par                      $60,000 Building        $480,000                                  Retained earnings           $418,000 Acc. Depr. ( $40,000)       $440,000                       Total                                    $618,000 Total Assets                         $718,000           Total Liabilities & Equity            $718,000 You are asked to prepare, in good financial form, a set...
The statement of financial position of Delacosta Corporation as at December 31, 2020, is as follows:...
The statement of financial position of Delacosta Corporation as at December 31, 2020, is as follows: DELACOSTA CORPORATION Statement of Financial Position December 31, 2020 Assets Goodwill (Note 1) $70,000 Buildings (Note 2) 1,640,000 Inventory 312,100 Investments—trading (Note 3) 100,000 Land 950,000 Accounts receivable 170,000 Investments in shares (FV-OCI) (Note 4) 87,000 Cash 175,900 Assets allocated to trustee for plant expansion Cash 120,000 Treasury notes, at cost and fair value 138,000 $3,763,000 Equities Notes payable (Note 4) $600,000 Common shares,...
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                    
ASTRO Inc. Statement of Financial Position December 31, 2018             Assets                                                              Liabilities Cash                                      $259,000           Notes Payable 8%             $60,000 Inventory                                $6,000           Accounts Payable              $40,000 Prepaid Insurance                $3,000                      Total                                  $100,000 Supplies                                  $4,000           Common Stock $5 par   $140,000 Land                                       $6,000           Excess of par                      $60,000 Building        $480,000                                  Retained earnings           $418,000 Acc. Depr. ( $40,000)       $440,000                       Total                                    $618,000 Total Assets                         $718,000           Total Liabilities & Equity            $718,000 You are asked to prepare, in good financial form, a set...
The Statement of Financial Position date (i.e., the year-end date) for Company AB is 31 December...
The Statement of Financial Position date (i.e., the year-end date) for Company AB is 31 December 2018. The financial accounts for Company AB were approved on 1 March 2019. On 1 February 2019, a major customer of Company AB, announced that they were bankrupt and could not pay the huge amounts they owed to Firm AB For Company AB for the financial year-ended 31 December 2018 this event: Select one: a. None of these answers b. Is not an adjusting...
The statement of financial position of KY Limited at 31 December 2019 shows the following. Non-current...
The statement of financial position of KY Limited at 31 December 2019 shows the following. Non-current assets GH₵ 1,350,000; current assets GH₵ 140,000; ordinary share capital GH₵ 900,000; general reserve GH₵ 150,000; 10% debentures GH₵ 200,000; current liabilities GH₵ 90,000; retained earnings GH₵ 150,000 The profit from operations for the year was GH₵ 65 000 and the finance costs were GH₵ 20 000. What is the return on capital employed for 2019? A. 3.21% B. 4.64% C. 5.7% D. 5.91%...
The following section is taken from Privy Ltd’s statement of financial position at 31 December 2018....
The following section is taken from Privy Ltd’s statement of financial position at 31 December 2018. Interest is payable half-yearly on 1 January and 1 July. Assume no interest is accrued on 30 June. Current liabilities Interest payable on unsecured notes (for 6 months from 1 July to 31 December) $360,000 Non-current liabilities Unsecured notes payable, 10% due 1 January 2022 $6,000,000 Required: Prepare journal entries to record interest payments, and redemption of unsecured notes. a.    Journalise the payment of interest...
The December 31, 2016, statement of financial position of Cotton Corporation includes the following: 9% bonds...
The December 31, 2016, statement of financial position of Cotton Corporation includes the following: 9% bonds payable due December 31, 2025     $718,900 The bonds have a face value of $700,000 and were issues on December 31, 2015, at 103, with interest payable on July 1 and December 31 of each year. Cotton uses straight-line amortization to amortize bond premiums or discount. On March 1, 2017, Cotton retired $280,000 of these bonds at 98 plus accrued interest. Ignoring income taxes, what...
Luo Inc. had the following statement of financial position at December 31, 2014 (amounts in thousands)....
Luo Inc. had the following statement of financial position at December 31, 2014 (amounts in thousands). LUO INC. Statement of Financial Position December 31, 2014 Investments ¥ 32,000 Share capital—ordinary ¥100,000 Plant assets (net) 81,000 Retained earnings 23,200 Land 40,000 Bonds payable 41,000 Accounts receivable 21,200 Accounts payable 30,000 Cash 20,000 ¥194,200 ¥194,200 During 2015, the following occurred. 1. Luo liquidated its non-trading equity investment portfolio at a loss of ¥5,000. 2. A tract of land was purchased for ¥38,000....
The statement of financial position of Dai Sing Ltd as at 31 December 2016 showed a...
The statement of financial position of Dai Sing Ltd as at 31 December 2016 showed a balance in Accounts Receivable of $1,753,800, and a credit balance in Allowance for Doubtful Accounts of $210,456. During the financial year ended 31 December 2017, the following transactions occurred: sales on account $5,566,300; sales returns $340,000; collections from customers $5,072,800; accounts written off $209,000; discount allowed $8,800; and collection of previously written off accounts of $57,000. Required a      ‘The direct write-off method of accounting...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT