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aton Company issued $600,000 of ei

aton Company issued $600,000 of ei

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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Early Retirement of Bonds Eaton Company issued $600,000 of eight percent, 20-year bonds at 106 on January 1, 2016. Interest is payable semiannually on July 1 and January 1. Through January 1, 2022, Eaton amortized $5,000 of the bond premium. On January 1, 2022, Eaton retired the bonds at 103 (after making the interest payment on that date). Prepare the journal entry to record the bond retirement on January 1, 2022. Date Jan.1 Bonds Payable General Journal Description Premium on Bonds Payable Gain on Bond Retirement Cash To retire bonds and record gain on bond retirement. ◆ → Debit 600,000 $ 600,000 5,000 x ✓ 0 ✓ 0✓ ✓ $ Credit 0 ✓ 0 ✓ 18,000 x 618,000 ✓
Transcribed Image Text:Early Retirement of Bonds Eaton Company issued $600,000 of eight percent, 20-year bonds at 106 on January 1, 2016. Interest is payable semiannually on July 1 and January 1. Through January 1, 2022, Eaton amortized $5,000 of the bond premium. On January 1, 2022, Eaton retired the bonds at 103 (after making the interest payment on that date). Prepare the journal entry to record the bond retirement on January 1, 2022. Date Jan.1 Bonds Payable General Journal Description Premium on Bonds Payable Gain on Bond Retirement Cash To retire bonds and record gain on bond retirement. ◆ → Debit 600,000 $ 600,000 5,000 x ✓ 0 ✓ 0✓ ✓ $ Credit 0 ✓ 0 ✓ 18,000 x 618,000 ✓
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