Indigo Co. sells $425,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Indigo buys back $136,000 worth of bonds for $142,000 (includes accrued interest). Give entries through December 1, 2022. Prepare all of the relevant journal entries from the time of sale until December 31, 2022. (Assume that no reversing entries were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. Please utilize the dates provided in the images to complete this problem
Indigo Co. sells $425,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Indigo buys back $136,000 worth of bonds for $142,000 (includes accrued interest). Give entries through December 1, 2022. Prepare all of the relevant journal entries from the time of sale until December 31, 2022. (Assume that no reversing entries were made.) (Round present value factor calculations to 5 decimal places, e.g. 1.25124 and the final answers to 0 decimal places e.g. 58,971. Please utilize the dates provided in the images to complete this problem
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Indigo Co. sells $425,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 8%. On October 1, 2021, Indigo buys back $136,000 worth of bonds for $142,000 (includes accrued interest). Give entries through December 1, 2022.
Prepare all of the relevant
Please utilize the dates provided in the images to complete this problem

Transcribed Image Text:Date
Account Titles and Explanation
Debit
Credit
6/1/20
Cash
482228
Bonds Payable
425000
Premium on Bonds Payable
57228
12/1/20
Interest Expense
19289
Premium on Bonds Payable
6211
Cash
25500
12/31/20
6/1/21
10/1/21
(To record interest expense and premium amortization)

Transcribed Image Text:10/1/21
(To record buy back of bonds)
12/1/21
12/31/21
6/1/22
12/1/22
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