P10-4A Kershaw Electric Ltd. sold £6,000,000, 10%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) At December 31, 2017, the amount of amortized bond discount is £8,000. Show the statement of financial position presentation of the bond liability at December 31, 2017. (c) On January 1, 2019, when the carrying value of the bonds was £5,896,000, the com- pany redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid.

P10-4A Kershaw Electric Ltd. sold £6,000,000, 10%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) At December 31, 2017, the amount of amortized bond discount is £8,000. Show the statement of financial position presentation of the bond liability at December 31, 2017. (c) On January 1, 2019, when the carrying value of the bonds was £5,896,000, the com- pany redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid.

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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