Right Verdict, a law firm, sells $9,000,000 of four-year, 4% bonds priced to yield 2.8%. The bonds are dated January 1, 2023, but due to some regulatory hurdles are not issued until May 1, 2023. Interest is payable on January 1 and July 1 each year. The bonds sell for $9,406,007 plus accrued interest. In mid-June, Right Verdict earns an unusually large fee of $12,500,000 for one of its cases. The firm uses part of the proceeds to buy back the bonds in the open market on July 1, 2023, after the interest payment has been made. Right Verdict pays a total of $9,488,061 to reacquire the bonds and retires them. a. Prepare the journal entry to record the issuance of the bonds on May 1, 2023. Assume that Right Verdict has adopted a policy of crediting interest expense for the accrued interest on the date of sal b. Prepare the journal entry to record the payment of interest and related amortization on July 1, 2023.
Right Verdict, a law firm, sells $9,000,000 of four-year, 4%
Interest is payable on January 1 and July 1 each year. The bonds sell for $9,406,007 plus accrued interest.
In mid-June, Right Verdict earns an unusually large fee of $12,500,000 for one of its cases. The firm uses part of the proceeds to buy back the bonds in the open market on July 1, 2023, after the interest payment has been made. Right Verdict pays a total of $9,488,061 to reacquire the bonds and retires them.
a. Prepare the
b. Prepare the journal entry to record the payment of interest and related amortization on July 1, 2023.Right Verdict, a law firm, sells $9,000,000 of four-year, 4% bonds priced to yield 2.8%. The bonds are dated January 1, 2023, but due to some regulatory hurdles are not issued until May 1, 2023.
Interest is payable on January 1 and July 1 each year. The bonds sell for $9,406,007 plus accrued interest.
In mid-June, Right Verdict earns an unusually large fee of $12,500,000 for one of its cases. The firm uses part of the proceeds to buy back the bonds in the open market on July 1, 2023, after the interest payment has been made. Right Verdict pays a total of $9,488,061 to reacquire the bonds and retires them.
a. Prepare the journal entry to record the issuance of the bonds on May 1, 2023. Assume that Right Verdict has adopted a policy of crediting interest expense for the accrued interest on the date of sal
b. Prepare the journal entry to record the payment of interest and related amortization on July 1, 2023.
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