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On April 1, 2025, Sarasota Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2026, Sarasota took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2026. Prepare the journal entries needed on the books of Sarasota Company to record the following. (Do not round intermediate calculations. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) (a) (b) O (d) No. (a) April 1, 2025: issuance of the bonds. October 1, 2025: payment of semiannual interest. December 31, 2025: accrual of interest expense. March 1, 2026: extinguishment of 7,500 bonds. (No reversing entries made.) Date 4/1/25 V Account Titles and Explanation Cash Discount on Bonds Payable Debit Credi =

On April 1, 2025, Sarasota Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2026, Sarasota took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2026. Prepare the journal entries needed on the books of Sarasota Company to record the following. (Do not round intermediate calculations. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) (a) (b) O (d) No. (a) April 1, 2025: issuance of the bonds. October 1, 2025: payment of semiannual interest. December 31, 2025: accrual of interest expense. March 1, 2026: extinguishment of 7,500 bonds. (No reversing entries made.) Date 4/1/25 V Account Titles and Explanation Cash Discount on Bonds Payable Debit Credi =

FINANCIAL ACCOUNTING
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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On April 1, 2025, Sarasota Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2026, Sarasota took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2026. Prepare the journal entries needed on the books of Sarasota Company to record the following. (Do not round intermediate calculations. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) (a) (b) O (d) No. (a) April 1, 2025: issuance of the bonds. October 1, 2025: payment of semiannual interest. December 31, 2025: accrual of interest expense. March 1, 2026: extinguishment of 7,500 bonds. (No reversing entries made.) Date 4/1/25 V Account Titles and Explanation Cash Discount on Bonds Payable Debit Credi =
Transcribed Image Text:On April 1, 2025, Sarasota Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2026, Sarasota took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2026. Prepare the journal entries needed on the books of Sarasota Company to record the following. (Do not round intermediate calculations. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.) (a) (b) O (d) No. (a) April 1, 2025: issuance of the bonds. October 1, 2025: payment of semiannual interest. December 31, 2025: accrual of interest expense. March 1, 2026: extinguishment of 7,500 bonds. (No reversing entries made.) Date 4/1/25 V Account Titles and Explanation Cash Discount on Bonds Payable Debit Credi =
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