Cupola Fan Corporation issued 12%, $560,000, 10-year bonds for $529,000 on June 30, 2021. Debt issue costs were $3,100. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $539,000. 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, 2021 and June 30, 2022 and call of the bonds according to IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 3 4 Date June 30, 2021 June 30, 2022 Cash July 01, 2022 Answer is complete but not entirely correct. December 31, 202 Interest expense Bonds payable Cash Bonds payable Interest expense Bonds payable Cash General Journal Bonds payable Loss on early extinguishment Cash ✓ ✓ › › › ✓ 333 333 Debit 525,900 35,150 X 35,150 X 529,310✔ 9,690 Credit 525,900✔ 1,550 x 33,600✔ 1,550 X 33,600✔ 539,000✔

Cupola Fan Corporation issued 12%, $560,000, 10-year bonds for $529,000 on June 30, 2021. Debt issue costs were $3,100. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2022), the corporation exercised its call privilege and retired the bonds for $539,000. 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, 2021 and June 30, 2022 and call of the bonds according to IFRS. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 2 3 4 Date June 30, 2021 June 30, 2022 Cash July 01, 2022 Answer is complete but not entirely correct. December 31, 202 Interest expense Bonds payable Cash Bonds payable Interest expense Bonds payable Cash General Journal Bonds payable Loss on early extinguishment Cash ✓ ✓ › › › ✓ 333 333 Debit 525,900 35,150 X 35,150 X 529,310✔ 9,690 Credit 525,900✔ 1,550 x 33,600✔ 1,550 X 33,600✔ 539,000✔

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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