Presented below are selected transactions on the books of Sarasota Foundry. July 1, 2022 Dec. 31 Jan. 1, 2023 Jan. 2 Dec. 31 Bonds payable with a par value of €892,800, which are dated January 1, 2022, are sold at 112.290 plus accrued interest to yield 10%. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2032. (Use interest expense account for accrued interest.) Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. Interest on the bonds is paid. Bonds of par value of €357,120 are called at 102 and extinguished. Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized. Prepare journal entries for the transactions above. (Round intermediate calculations to 5 decimal places, e.g. 1.25247 and final answers to
Presented below are selected transactions on the books of Sarasota Foundry. July 1, 2022 Dec. 31 Jan. 1, 2023 Jan. 2 Dec. 31 Bonds payable with a par value of €892,800, which are dated January 1, 2022, are sold at 112.290 plus accrued interest to yield 10%. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2032. (Use interest expense account for accrued interest.) Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount of premium. Interest on the bonds is paid. Bonds of par value of €357,120 are called at 102 and extinguished. Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized. Prepare journal entries for the transactions above. (Round intermediate calculations to 5 decimal places, e.g. 1.25247 and final answers to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Presented below are selected transactions on the books of Sarasota Foundry.
July 1, 2022
Dec. 31
Jan. 1, 2023
Jan. 2
Dec. 31
Date
July 1, 2022
Prepare journal entries for the transactions above. (Round intermediate calculations to 5 decimal places, e.g. 1.25247 and final answers to
2 decimal places, e.g. 38,548.37. 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 amount is entered. Do not indent manually.)
Dec. 31, 2022
Jan. 1, 2023
Bonds payable with a par value of €892,800, which are dated January 1, 2022, are sold at 112.290 plus accrued
interest to yield 10%. They are coupon bonds, bear interest at 12% ( payable annually at January 1), and mature
January 1, 2032. (Use interest expense account for accrued interest.)
Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount
of premium.
Dec. 31, 2023
Interest on the bonds is paid.
Bonds of par value of €357,120 are called at 102 and extinguished.
Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium
amortized.
Jan. 2, 2023
Account Titles and Explanation
Cash
Bonds Payable
Interest Expense
Interest Expense
Interest Payable
(To record the interest)
Bonds Payable
Interest Expense
(To amortize the premium)
Interest Payable
Cash
Bonds Payable
Cash
Loss on Extinguishment of Debt
Interest Expense
Premium on Bonds Payable
(To record the interest)
Premium on Bonds Payable
Interest Payable
(To amortize the premium)
Debit
1002525.12
107136
57009.74
107136
378206.15
94551.54
74918.28
Credit
892800
109725.12
107136
57009.74
107136
364262.40
13943.75
74918.28
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