Prepare journal entries to record the following transactions relating to long-term bonds of Kirby, Inc. On June 1, 2017, Kirby, Inc. issued $8,000,000, 6% bonds for $7,841,000, which includes accrued interest. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2027. The bonds are callable at 102. On August 1, 2017, Kirby paid interest on the bonds and recorded amortization. Kirby uses straight-line amortization. On February 1, 2019, Kirby paid interest and recorded amortization on all of the bonds, and purchased $5,000,000 of the bonds at the call price. Assume that a reversing entry was made on January 1, 2019.
Prepare journal entries to record the following transactions relating to long-term bonds of Kirby, Inc. On June 1, 2017, Kirby, Inc. issued $8,000,000, 6% bonds for $7,841,000, which includes accrued interest. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2027. The bonds are callable at 102. On August 1, 2017, Kirby paid interest on the bonds and recorded amortization. Kirby uses straight-line amortization. On February 1, 2019, Kirby paid interest and recorded amortization on all of the bonds, and purchased $5,000,000 of the bonds at the call price. Assume that a reversing entry was made on January 1, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On June 1, 2017, Kirby, Inc. issued $8,000,000, 6% bonds for $7,841,000, which includes accrued interest. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2027. The bonds are callable at 102.
On August 1, 2017, Kirby paid interest on the bonds and recorded amortization. Kirby uses straight-line amortization.
On February 1, 2019, Kirby paid interest and recorded amortization on all of the bonds, and purchased $5,000,000 of the bonds at the call price. Assume that a reversing entry was made on January 1, 2019.
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