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1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why? 3) Why do some bonds sell below face value? 4) Which of the following items are ammortized? A. bonds B. Discounts C. Future cash receipts D. Redemption amount F. Contract rate of interest G. It depends on the face value of the bond H. Interest Expense

1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity? 2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why? 3) Why do some bonds sell below face value? 4) Which of the following items are ammortized? A. bonds B. Discounts C. Future cash receipts D. Redemption amount F. Contract rate of interest G. It depends on the face value of the bond H. Interest Expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1) Were the bonds in the entry on Dec 31. of year 2 redeemed at Maturity?

2) You suspect there is an error in one of the bond redemption entries. Assumimg the the amounts are correct, which entry is questionable? Why?

3) Why do some bonds sell below face value?

4) Which of the following items are ammortized?

A. bonds

B. Discounts

C. Future cash receipts

D. Redemption amount

F. Contract rate of interest

G. It depends on the face value of the bond

H. Interest Expense

# Journal Entries, Year 2 You have been asked to continue your work on the Springfield Corporation audit. The journal entries for the current year are shown as follows: | Date | Description | Journal Debit | Journal Credit | |------------|------------------------------------|---------------|----------------| | Jun. 30 | Interest Expense | 5,411 | | | | Discount on Bonds Payable | 3,103 | | | | Premium on Bonds Payable | | 22,500 | | | Cash | | 28,875 | | Dec. 31 | Interest Expense | 19,397 | | | | Discount on Bonds Payable | 3,103 | | | | Bonds Payable | | 1,650,000 | | | Gain on Redemption of Bonds | | 34,286 | | | Premium on Bonds Payable | 41,000 | | | | Cash | 1,554,890 | | This document records journal entries for specific financial events at Springfield Corporation during Year 2. Key financial actions include managing interest expenses, handling bonds payable, and accounting for gains on bond redemptions. Each entry reflects various credits and debits, aligning with accounting principles.
Transcribed Image Text:# Journal Entries, Year 2 You have been asked to continue your work on the Springfield Corporation audit. The journal entries for the current year are shown as follows: | Date | Description | Journal Debit | Journal Credit | |------------|------------------------------------|---------------|----------------| | Jun. 30 | Interest Expense | 5,411 | | | | Discount on Bonds Payable | 3,103 | | | | Premium on Bonds Payable | | 22,500 | | | Cash | | 28,875 | | Dec. 31 | Interest Expense | 19,397 | | | | Discount on Bonds Payable | 3,103 | | | | Bonds Payable | | 1,650,000 | | | Gain on Redemption of Bonds | | 34,286 | | | Premium on Bonds Payable | 41,000 | | | | Cash | 1,554,890 | | This document records journal entries for specific financial events at Springfield Corporation during Year 2. Key financial actions include managing interest expenses, handling bonds payable, and accounting for gains on bond redemptions. Each entry reflects various credits and debits, aligning with accounting principles.
The image appears to depict a financial accounting entry with the following details: **Date: 31** - **Retained Earnings:** 73,080 - **Interest Expense:** 73,080 - **Cash:** 22,500 **Date: 31** - **Bonds Payable:** 500,000 - **Premium on Bonds Payable:** 24,824 - **Loss on Redemption of Bonds:** 20,600 - **Cash:** 545,424 **Questions:** This document is likely a journal entry reflecting bond transactions, including details on retained earnings, interest expenses, bond premiums, and cash flows related to bond redemption. There are no graphs or diagrams depicted in the image.
Transcribed Image Text:The image appears to depict a financial accounting entry with the following details: **Date: 31** - **Retained Earnings:** 73,080 - **Interest Expense:** 73,080 - **Cash:** 22,500 **Date: 31** - **Bonds Payable:** 500,000 - **Premium on Bonds Payable:** 24,824 - **Loss on Redemption of Bonds:** 20,600 - **Cash:** 545,424 **Questions:** This document is likely a journal entry reflecting bond transactions, including details on retained earnings, interest expenses, bond premiums, and cash flows related to bond redemption. There are no graphs or diagrams depicted in the image.
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