Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2024. Debt issue costs were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2025), 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. to 4. Prepare the journal entries to record the issuance of the bonds, the payment of interest and amortization of debt issue costs on December 31, 2024 & June 30, 2025, and the call of the bonds.
Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2024. Debt issue costs were $1,500. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2025), 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. to 4. Prepare the journal entries to record the issuance of the bonds, the payment of interest and amortization of debt issue costs on December 31, 2024 & June 30, 2025, and the call of the bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ef 52.
Transcribed Image Text:Cupola Fan Corporation issued 10%, $400,000, 10-year bonds for $385,000 on June 30, 2024.
Debt issue costs were $1,500.
Interest is paid semiannually on December 31 and June 30.
One year from the issue date (July 1, 2025), 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. to 4. Prepare the journal entries to record the issuance of the bonds, the payment of interest and amortization of debt issue costs on
December 31, 2024 & June 30, 2025, and the call of the bonds.
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