Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2018. Debt issue costswere $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1,2019), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses thestraight-line method both to determine interest expense and to amortize debt issue costs.Required:1. Prepare the journal entry to record the issuance of the bonds.
Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2018. Debt issue costswere $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1,2019), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses thestraight-line method both to determine interest expense and to amortize debt issue costs.Required:1. Prepare the journal entry to record the issuance of the bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2018. Debt issue costs
were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1,
2019), the corporation exercised its call privilege and retired the bonds for $395,000. The corporation uses the
straight-line method both to determine interest expense and to amortize debt issue costs.
Required:
1. Prepare the
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