Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 10 - Reporting and Analyzing Liabilities - Exercises: E10-18

Answer

Step1: 2010 Jan.01 Cash 515,000 dollars Bonds Payable 500,000 dollars Premium on Bonds payable 15,000 dollars Step2: 2010 Dec. 31 Bonds Interest Expenses 34,250 dollars Premium on Bonds payable 750 dollars Bonds Interest payable 35,000 dollars Step3: 2011 Jan. 01 Bonds interest payable 35,000 dollars Cash 35,000 dollars Step4: 2030 Jan. 01 Bonds Payable 500,000 dollars Cash 500,000 dollars

Work Step by Step

Step1: To record issue of bonds at a premium Step2: To record accrued bond interest and Amortization of bond premium Step3: To record payment of bonds interest Step4: To record redemption of bonds on maturity
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