P15-1A-4A_6A_9A C-Wyckoff.docx

P15-1A-4A_6A_9A C-Wyckoff.docx - P15-1A thru P15-4A P15-6A...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
P15-1A thru P15-4A, P15-6A & P15-9A 11/25/2017 Charles Wyckof P15-1A On May 1, 2017, Herron Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2017, and pay interest annually on May 1. Financial statements are prepared annually on December 31. Instructions (a) Prepare the journal entry to record the issuance of the bonds. (b) Prepare the adjusting entry to record the accrual of interest on December 31, 2017. (c) Show the balance sheet presentation on December 31, 2017. (d) Prepare the journal entry to record payment of interest on May 1, 2018. (e) Prepare the adjusting entry to record the accrual of interest on December 31, 2018. (f) Assume that on January 1, 2019, Herron pays the accrual bond interest and calls the bonds. The call price is 102. Record the payment of interest and redemption of the bonds. May 1 Cash $600,000 (a) Bonds Payable $600,000 (issued 600 5-yr, 9% bonds @ 100) Dec 31 Interest Exp. 36,000 (b) Interest Payable 36,000 (interest accrued) May 1 Interest Payable 36,000 (d) Interest Exp. 18,000 Cash 54,000 (interest payment out) Dec 31 Interest Exp. 36,000 (e) Interest Payable 36,000 (interest accrual $600,000 x 9% x 8/2 = 36,000) Jan 1 Interest Payable 36,000 (f) Cash 36,000 (interest payment out) Jan 1 Bonds Payable 600,000 Loss on Bond Redemption 12,000 Cash 612,000 (call bonds @ 102, payment & loss) (c) Partial Balance Sheet, Dec 31 2017 Current Liabilities Interest Payable $36,000 Long-Term Liabilities Bonds Payable, due in 2022 $600,000
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
P15-2A Kershaw Electric sold $6,000,000, 10%, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) At December 31, 2017, $8,000 of the Discount on Bonds Payable account has been amortized. Show the balance sheet presentation of the long-term liability at December 31, 2017.
Image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern