On March 1, 2020, Mitchell Inc. issued 60, 6%, $1,000 bonds dated March 1, 2020 for $62,626. The bonds pay cash interest semiannually each June 30, and December 31, and were issued to yield 5%. The bonds mature February 28, 2025, and the company uses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as follows: Amortization Schedule Cash Effective Premium Outstanding Interest Interest amortization Balance 03/01/20 $62,626 1 08/31/20 $1,800 $1,566 ($234) 62,391 02/28/21 1,800 1,560 (240) 62,151 Required: Prepare journal entries on the following dates. Round to the nearest dollar. 1. March 1, 2020, bond issuance. 2. August 31, 2020, interest payment. 3. December 31, 2020, adjusting entry. Note: You may create a table as follows to organize your journal entries. Date Account titles Debit Credit 1 Cash 10,000 Sales Revenue 10,000 Edit Insert Format Table
On March 1, 2020, Mitchell Inc. issued 60, 6%, $1,000 bonds dated March 1, 2020 for $62,626. The bonds pay cash interest semiannually each June 30, and December 31, and were issued to yield 5%. The bonds mature February 28, 2025, and the company uses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as follows: Amortization Schedule Cash Effective Premium Outstanding Interest Interest amortization Balance 03/01/20 $62,626 1 08/31/20 $1,800 $1,566 ($234) 62,391 02/28/21 1,800 1,560 (240) 62,151 Required: Prepare journal entries on the following dates. Round to the nearest dollar. 1. March 1, 2020, bond issuance. 2. August 31, 2020, interest payment. 3. December 31, 2020, adjusting entry. Note: You may create a table as follows to organize your journal entries. Date Account titles Debit Credit 1 Cash 10,000 Sales Revenue 10,000 Edit Insert Format Table
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please look at the picture - thank you
Transcribed Image Text:semiannually each June 30, and December 31, and were issued to yield 5%. The bonds mature February 28, 2025, and the
company uses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as
On March 1, 2020, Mitchell Inc. issued 60, 6%, $1,000 bonds dated March 1, 2020 for $62,626. The bonds pay cash interest
follows:
Amortization Schedule
Cash
Effective
Premium
Outstanding
Interest
Interest
amortization
Balance
03/01/20
$62,626
1
08/31/20
$1,800
$1,566
($234)
62,391
2
02/28/21
1,800
1,560
(240)
62,151
Required: Prepare journal entries on the following dates. Round to the nearest dollar.
1. March 1, 2020, bond issuance.
2. August 31, 2020, interest payment.
3. December 31, 2020, adjusting entry.
Note: You may create a table as follows to organize your journal entries.
Date
Account titles
Debit
1
Cash
Credit
10,000
Sales Revenue
10,000
Edit Insert Format
Table
12nt Y Paren
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education