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Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to O decimal place, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to O decimal place, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

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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Metlock Co. is building a new music arena at a cost of $5,519,000. It received a down payment of $596,000 from local businesses to support the project, and now needs to borrow $ 4,923,000 to complete the project. It therefore decides to issue $4,923,000 of 8%, 20-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 10 %. Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to 0 decimal place, e.g. 38, 548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit July 1, 2027 Interest Expense Premium on Bonds Payable (To record interest) July 1, 2027 Premium on Bonds Payable Gain on Redemption of Bonds (To record reacquisition) Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to O decimal place, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date July 1, 2027 July 1, 2027 Account Titles and Explanation Interest Expense Premium on Bonds Payable Cash (To record interest) Bonds Payable Premium on Bonds Payable Gain on Redemption of Bonds Cash (To record reacquisition) Debit Credit NOO COCO
Transcribed Image Text:Metlock Co. is building a new music arena at a cost of $5,519,000. It received a down payment of $596,000 from local businesses to support the project, and now needs to borrow $ 4,923,000 to complete the project. It therefore decides to issue $4,923,000 of 8%, 20-year bonds. These bonds were issued on January 1, 2024, and pay interest annually on each January 1. The bonds yield 10 %. Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to 0 decimal place, e.g. 38, 548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date Account Titles and Explanation Debit Credit July 1, 2027 Interest Expense Premium on Bonds Payable (To record interest) July 1, 2027 Premium on Bonds Payable Gain on Redemption of Bonds (To record reacquisition) Assume that on July 1, 2027, Metlock Co. retires 40% of the bonds at a cost of $2,083,000 plus accrued interest. Prepare the journal entry to record this retirement. (Round answers to O decimal place, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) Date July 1, 2027 July 1, 2027 Account Titles and Explanation Interest Expense Premium on Bonds Payable Cash (To record interest) Bonds Payable Premium on Bonds Payable Gain on Redemption of Bonds Cash (To record reacquisition) Debit Credit NOO COCO
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