On February 1, 2022, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable semiannually on January 31 and July 31 with the bonds maturing on February 1, 2032 (10-year bonds). The bonds are callable at 102. On February 1, 2022, Mojito retired $750,000 of the bonds at the call price. Required: Prepare the journal entry for the issuance of the bonds Prepare any required journal entries for interest payments on July 31, 2022 and January 31, 2023. Mojito uses straight-line amortization to amortize any discount or premium. Prepare the required entry to record the retirement of the bonds on February 1, 2023.
On February 1, 2022, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable semiannually on January 31 and July 31 with the bonds maturing on February 1, 2032 (10-year bonds). The bonds are callable at 102. On February 1, 2022, Mojito retired $750,000 of the bonds at the call price. Required: Prepare the journal entry for the issuance of the bonds Prepare any required journal entries for interest payments on July 31, 2022 and January 31, 2023. Mojito uses straight-line amortization to amortize any discount or premium. Prepare the required entry to record the retirement of the bonds on February 1, 2023.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- On February 1, 2022, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable semiannually on January 31 and July 31 with the bonds maturing on February 1, 2032 (10-year bonds). The bonds are callable at 102. On February 1, 2022, Mojito retired $750,000 of the bonds at the call price.
Required:
- Prepare the
journal entry for the issuance of the bonds - Prepare any required journal entries for interest payments on July 31, 2022 and January 31, 2023. Mojito uses straight-line amortization to amortize any discount or premium.
- Prepare the required entry to record the retirement of the bonds on February 1, 2023.
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