Larkspur, Inc. had outstanding $5,540,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $8,870,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 99. A portion of the proceeds was used to call the 11% bonds (with unamortized discount of $55,400) at 101 on August 1. Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Larkspur, Inc. had outstanding $5,540,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $8,870,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 99. A portion of the proceeds was used to call the 11% bonds (with unamortized discount of $55,400) at 101 on August 1. Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![4)
Larkspur, Inc. had outstanding $5,540,000 of 11% bonds (interest payable July 31 and January 31)
due in 10 years. On July 1, it issued $8,870,000 of 10%, 15-year bonds (interest payable July 1
and January 1) at 99. A portion of the proceeds was used to call the 11% bonds (with
unamortized discount of $55,400) at 101 on August 1.
Prepare the journal entries necessary to record issue of the new bonds and the refunding of the
bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
July 1
(To record isSuance of 10% bonds)
August 1
(To record retirement of 11% bonds)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb62babb-a5eb-4e88-badc-2e41dede20de%2F5215b92b-789a-46f4-989c-3d58d06a621c%2F8qkqvu_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4)
Larkspur, Inc. had outstanding $5,540,000 of 11% bonds (interest payable July 31 and January 31)
due in 10 years. On July 1, it issued $8,870,000 of 10%, 15-year bonds (interest payable July 1
and January 1) at 99. A portion of the proceeds was used to call the 11% bonds (with
unamortized discount of $55,400) at 101 on August 1.
Prepare the journal entries necessary to record issue of the new bonds and the refunding of the
bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No
Entry" for the account titles and enter 0 for the amounts. Credit account titles are
automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
July 1
(To record isSuance of 10% bonds)
August 1
(To record retirement of 11% bonds)
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