Campbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1. Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.*2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.)3. Determine the total interest expense for 20Y1. *Refer to the Chart of Accounts for exact wording of account titles. JournalInstructionsChart of AccountsCampbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1. Campbell issued $30,000,000 of 10-year,1. and 2. Journalize the entries to record the transactions. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.CHART OF ACCOUNTS10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds ispayable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Campbell, Inc.PAGE 10General LedgerRequired:JOURNALACCOUNTING EQUATION1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. *ASSETSREVENUEDATEDESCRIPTIONPOST. REF.DEBITCREDITASSETSLIABILITIESEQUITY2. Journalize the entries to record the following:*110 Cash410 Sales1a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond111 Petty Cash610 Interest Revenue2premium, using the interest method. (Round to the nearest dollar.)121 Accounts Receivable611 Gain on Redemption of Bonds3b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the122 Allowance for Doubtful Accountsinterest method. (Round to the nearest dollar.)4126 Interest ReceivableEXPENSES3. Determine the total interest expense for 20Y1.5127 Notes Receivable510 Cost of Merchandise Sold*Refer to the Chart of Accounts for exact wording of account titles.6.131 Merchandise Inventory515 Credit Card Expense141 Office Supplies516 Cash Short and Over142 Store Supplies521 Sales Salaries Expense151 Prepaid Insurance522 Office Salaries ExpensePAGE 10191 Land531 Advertising ExpenseJOURNALACCOUNTING EQUATION192 Store Equipment532 Delivery ExpensePOST. REF.DATEDESCRIPTIONDEBITCREDITASSETSLIABILITIESEQUITY193 Accumulated Depreciation-Store Equipment533 Repairs Expense=1194 Office Equipment534 Selling Expenses2195 Accumulated Depreciation-Office Equipment535 Rent Expense3536 Insurance ExpenseLIABILITIES537 Office Supplies Expense210 Accounts Payable538 Store Supplies ExpenseFinal Question221 Salaries Payable541 Bad Debt Expense231 Sales Tax Payable561 Depreciation Expense-Store Equipment3. Determine the total interest expense for 2OY1. $232 Interest Payable562 Depreciation Expense-Office Equipment241 Notes Payable590 Miscellaneous Expense251 Bonds Payable710 Interest Expense252 Discount on Bonds Payable711 Loss on Redemption of Bonds253 Premium on Bonds PayableEQUITY311 Common Stock312 Paid-In Capital in Excess of Par-Common Stock315 Treasury Stock321 Preferred Stock322 Paid-In Capital in Excess of Par-Preferred Stock331 Paid-In Capital from Sale of Treasury Stock340 Retained Earnings351 Cash Dividends352 Stock Dividends

Journal entries are prepared to record the financial and non financial transactions of the business…

Answered: Campbell, Inc. produces and sells…

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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Question

Campbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1. Campbell issued $30,000,000 of 10-year, 10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Required: 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.*

2. Journalize the entries to record the following:* a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.) b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the interest method. (Round to the nearest dollar.)

3. Determine the total interest expense for 20Y1. *Refer to the Chart of Accounts for exact wording of account titles.

Journal
Instructions
Chart of Accounts
Campbell, Inc. produces and sells outdoor equipment. On July 1, 20Y1. Campbell issued $30,000,000 of 10-year,
1. and 2. Journalize the entries to record the transactions. Round to the nearest dollar. Refer to the Chart of Accounts for exact wording of account titles.
CHART OF ACCOUNTS
10% bonds at a market (effective) interest rate of 9%, receiving cash of $31,951,110. Interest on the bonds is
payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Campbell, Inc.
PAGE 10
General Ledger
Required:
JOURNAL
ACCOUNTING EQUATION
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. *
ASSETS
REVENUE
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
2. Journalize the entries to record the following:*
110 Cash
410 Sales
1
a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond
111 Petty Cash
610 Interest Revenue
2
premium, using the interest method. (Round to the nearest dollar.)
121 Accounts Receivable
611 Gain on Redemption of Bonds
3
b. The interest payment on June 30, 20Y2, and the amortization of the bond premium, using the
122 Allowance for Doubtful Accounts
interest method. (Round to the nearest dollar.)
4
126 Interest Receivable
EXPENSES
3. Determine the total interest expense for 20Y1.
5
127 Notes Receivable
510 Cost of Merchandise Sold
*Refer to the Chart of Accounts for exact wording of account titles.
6.
131 Merchandise Inventory
515 Credit Card Expense
141 Office Supplies
516 Cash Short and Over
142 Store Supplies
521 Sales Salaries Expense
151 Prepaid Insurance
522 Office Salaries Expense
PAGE 10
191 Land
531 Advertising Expense
JOURNAL
ACCOUNTING EQUATION
192 Store Equipment
532 Delivery Expense
POST. REF.
DATE
DESCRIPTION
DEBIT
CREDIT
ASSETS
LIABILITIES
EQUITY
193 Accumulated Depreciation-Store Equipment
533 Repairs Expense
=
1
194 Office Equipment
534 Selling Expenses
2
195 Accumulated Depreciation-Office Equipment
535 Rent Expense
3
536 Insurance Expense
LIABILITIES
537 Office Supplies Expense
210 Accounts Payable
538 Store Supplies Expense
Final Question
221 Salaries Payable
541 Bad Debt Expense
231 Sales Tax Payable
561 Depreciation Expense-Store Equipment
3. Determine the total interest expense for 2OY1. $
232 Interest Payable
562 Depreciation Expense-Office Equipment
241 Notes Payable
590 Miscellaneous Expense
251 Bonds Payable
710 Interest Expense
252 Discount on Bonds Payable
711 Loss on Redemption of Bonds
253 Premium on Bonds Payable
EQUITY
311 Common Stock
312 Paid-In Capital in Excess of Par-Common Stock
315 Treasury Stock
321 Preferred Stock
322 Paid-In Capital in Excess of Par-Preferred Stock
331 Paid-In Capital from Sale of Treasury Stock
340 Retained Earnings
351 Cash Dividends
352 Stock Dividends

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