Brief Exercises: BE14-1Whiteside Corporation issues $500,000 of 9% bonds, due in 10 years, with interest payable semiannually. At the time of issue, the market rate for such bonds is 10%. Compute the issue price of the bonds. BE14-2The Colson Company issued $300,000 of 10% bonds on January 1, 2017. The bonds are due January 1, 2022, with interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Colson's journal entries for (a) the January issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. N=10 I/Y %= 5 Coupon Payment = 15,000 Future Value = 300,000 Present Value = 184,173.98 round to 184,174 January 2017 Cash 300,000 Bonds Payable 300,000 (To record sale of bonds) July 2017 Interest Expense 15,000 Cash 15,000 (To record interest coupon paid July 1, 2017) December 2017 Interest Expense 15,000 Interest Payable 15,000 (To record the interest accrued from June to December 31, 2017) BE14-3 Assume the bonds in BE14-2 were issued at 98. Prepare the journal entries for (a) January 1, (b) July 1, and (b) December 31. Assume The Colson Company records straight-line amortization semiannually. January 1 Cash (300,000 x .98) 294,000 Discount on Bonds Payable 6,000 Bonds Payable 300,000 (To record sale of the bond at 98% of par) July 1 Interest Expense 15,600 Cash 15,000 Discount on Bonds Payable* 600 *(6,000/10 coupon periods) (To record coupon payment and to accrue discount on bond) 1
December 31Interest Expense15,600Interest Payable15,000Discount on Bonds Payable*600(To accrued interest and discount on bond)BE14-4Assume the bonds in BE14-2 were issued at 103. Prepare the journal entries for (a) January 1, (b) July 1, and (c) December 31. Assume The Colson Company records straight-line amortization semiannually.January 1Cash309,000Bonds Payable300,000Premium on Bonds Payable9,000(To record sale of bond at 103% of par)July 1Interest Expense14,100Premium on Bond Payable*900Cash15,000*9,000/10 coupon periods(To record coupon payment)December 31Interest Expense14,100Premium on Bond Payable*900Interest Payable15,000(To record accrued interest and premiums)BE14-5Devers Corporation issued $400,000 of 6% bonds on May 1, 2017. The bonds were dated January 1, 2017, and mature January 1, 2020, with interest payable July 1 and January 1. The bonds were issued at face value plus accrued interest. Prepare
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