On 28 February 20X8, 20% of the bond was retired for $1,232,000 plus accrued interest to 28 February. Interest was paid on this date only for the portion of the bonds that were retired. Premium amortization was recorded on this date in the amount of $450, representing amortization on the retired debt only. Required: Provide the entries to record the bond interest on 28 February and the bond retirement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) O Answer is not complete. No Transaction General Journal Debit Credit 1 Interest expense 12,617 a. Premium on bonds payable 450 Cash 13,067 O 2 b. Bonds payable 1,120,000 O Premium on bonds payable 8,958 Cash 1,128,958 X

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Question
On 31 December 20X7, a company has the following bond on the statement of financial position:
Bond payable, 7%, interest due semi-annually on 31 Dec. and 30
June; maturity date, 30 June 20X11
Premium on bonds payable
$5,600,000
47,040
$5,647,040
Transcribed Image Text:On 31 December 20X7, a company has the following bond on the statement of financial position: Bond payable, 7%, interest due semi-annually on 31 Dec. and 30 June; maturity date, 30 June 20X11 Premium on bonds payable $5,600,000 47,040 $5,647,040
On 28 February 20X8, 20% of the bond was retired for $1,232,000 plus accrued interest to 28 February. Interest was paid on this date
only for the portion of the bonds that were retired. Premium amortization was recorded on this date in the amount of $450,
representing amortization on the retired debt only.
Required:
Provide the entries to record the bond interest on 28 February and the bond retirement. (If no entry is required for a
transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your
answers to the nearest whole dollar amount.)
X Answer is not complete.
No
Transaction
General Journal
Debit
Credit
1
a.
Interest expense
12,617
Premium on bonds payable
450
Cash
13,067 V
2
b.
Bonds payable
1,120,000 O
Premium on bonds payable
8,958
Cash
1,128,958 X
Transcribed Image Text:On 28 February 20X8, 20% of the bond was retired for $1,232,000 plus accrued interest to 28 February. Interest was paid on this date only for the portion of the bonds that were retired. Premium amortization was recorded on this date in the amount of $450, representing amortization on the retired debt only. Required: Provide the entries to record the bond interest on 28 February and the bond retirement. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations. Round your answers to the nearest whole dollar amount.) X Answer is not complete. No Transaction General Journal Debit Credit 1 a. Interest expense 12,617 Premium on bonds payable 450 Cash 13,067 V 2 b. Bonds payable 1,120,000 O Premium on bonds payable 8,958 Cash 1,128,958 X
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