On June 1, 2024, Cullumber Bottle Company sold $3,840,000 in long-term bonds for $3,368,086. The bonds will mature in 10 yearsand have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are tobe accounted for under the effective-interest method.(a)Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization ateach May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.)Date6/1/245/31/255/31/265/31/275/31/28LACredit CashLADebit Interest Expense1$LACredit Bond Discount11Carrying Amoun$

The bonds are the financial instruments for the business. The bonds are issued to raise money from…

Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date 6/1/24 Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amo $ LA

Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Date 6/1/24 Credit Cash Debit Interest Expense Credit Bond Discount Carrying Amo $ LA

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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Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

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On June 1, 2024, Cullumber Bottle Company sold $3,840,000 in long-term bonds for $3,368,086. The bonds will mature in 10 years
and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to
be accounted for under the effective-interest method.
(a)
Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at
each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.)
Date
6/1/24
5/31/25
5/31/26
5/31/27
5/31/28
LA
Credit Cash
LA
Debit Interest Expense
1
$
LA
Credit Bond Discount
11
Carrying Amoun
$

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(c)
Assume that on July 1, 2027, Swifty Co. redeems half of the bonds at a cost of $1,126,600 plus accrued interest. Prepare the
journal entry to record this redemption. (Round present value factor to 5 decimal places, e.g. 1.24356 and final answers to O decimal
places, 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
(To record interest)
(To record reacquisition)
Debit
Credit
11
TILL

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