Cupola Fan Corporation issued 12%, $580,000, 10-year bonds for $552,000 on June 30, 2024. • Debt issue costs were $3,300. • 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 $560,000. 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Cupola Fan Corporation issued 12%, $580,000, 10-year bonds for $552,000 on June 30, 2024. • Debt issue costs were $3,300. • 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 $560,000. 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. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Subject :- Accouning
Transcribed Image Text:No
1
2
3
4
Date
June 30, 2024
June 30, 2025
X Answer is complete but not entirely correct.
December 31, 202 Interest expense
July 01, 2025
General Journal
Cash
Discount and debt issue costs
Bonds payable
Discount and debt issue costs
Cash
Interest expense
Discount and debt issue costs
Cash
Bonds payable
Loss on early extinguishment
Discount and debt issue costs
Discount and debt iss costs
Cash
X
Debit
548,700
31,300
36,365
36,365
580,000
8,170
Credit
580,000
1,565
34,800
1,565
34,800
2,970
25,200 x
560,000
Transcribed Image Text:Cupola Fan Corporation issued 12%, $580,000, 10-year bonds for $552,000 on June 30, 2024.
Debt issue costs were $3,300.
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 $560,000.
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.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
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