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Solar Energy Inc. issued a $910,000, 10.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar’s year-end is December 31.   Period Ending   Cash Interest Paid Period Interest Expense Discount Amort. Unamortized Discount Carrying Value Oct. 1/23                                 $ 33,633       $ 876,367     Oct. 1/24   $ 91,000       $ 96,400       $ 5,400         28,232         881,768     Oct. 1/25     91,000         96,994         5,994         22,238         887,762     Oct. 1/26     91,000         97,654         6,654         15,584         894,416     Oct. 1/27     91,000         98,386         7,386         8,198         901,802     Oct. 1/28     91,000         99,198         8,198         0         910,000         $ 455,000       $ 488,633       $ 33,633                           Assume that interest has already been paid on October 1, 2026. Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2026, for cash of: $886,000 $894,416 $896,900

Solar Energy Inc. issued a $910,000, 10.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar’s year-end is December 31.   Period Ending   Cash Interest Paid Period Interest Expense Discount Amort. Unamortized Discount Carrying Value Oct. 1/23                                 $ 33,633       $ 876,367     Oct. 1/24   $ 91,000       $ 96,400       $ 5,400         28,232         881,768     Oct. 1/25     91,000         96,994         5,994         22,238         887,762     Oct. 1/26     91,000         97,654         6,654         15,584         894,416     Oct. 1/27     91,000         98,386         7,386         8,198         901,802     Oct. 1/28     91,000         99,198         8,198         0         910,000         $ 455,000       $ 488,633       $ 33,633                           Assume that interest has already been paid on October 1, 2026. Required: Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2026, for cash of: $886,000 $894,416 $896,900

FINANCIAL ACCOUNTING
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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Solar Energy Inc. issued a $910,000, 10.0%, five-year bond on October 1, 2023. Interest is paid annually each October 1. Solar’s year-end is December 31.
 

Period Ending   Cash
Interest
Paid		 Period
Interest
Expense		 Discount
Amort.		 Unamortized
Discount		 Carrying
Value
Oct. 1/23                                 $ 33,633       $ 876,367    
Oct. 1/24   $ 91,000       $ 96,400       $ 5,400         28,232         881,768    
Oct. 1/25     91,000         96,994         5,994         22,238         887,762    
Oct. 1/26     91,000         97,654         6,654         15,584         894,416    
Oct. 1/27     91,000         98,386         7,386         8,198         901,802    
Oct. 1/28     91,000         99,198         8,198         0         910,000    
    $ 455,000       $ 488,633       $ 33,633                        
 


Assume that interest has already been paid on October 1, 2026.

Required:
Using the amortization schedule provided above, record the entry to retire the bonds on October 1, 2026, for cash of:

  1. $886,000
  2. $894,416
  3. $896,900
Journal entry worksheet < 1 2 Record the retirement of bond for $896,900. Date Oct. 1 2026 3 Note: Enter debits before credits. Record entr General Journal Bond interest expense Bonds payable Cash Discount on bonds payable Gain on retirement of bonds payable Loss on retirement of bonds pavable Debit Credit View general Journal
Transcribed Image Text:Journal entry worksheet < 1 2 Record the retirement of bond for $896,900. Date Oct. 1 2026 3 Note: Enter debits before credits. Record entr General Journal Bond interest expense Bonds payable Cash Discount on bonds payable Gain on retirement of bonds payable Loss on retirement of bonds pavable Debit Credit View general Journal
Record the retirement of bond for $886,000. 2 Record the retirement of bond for $894,416. 3 Record the retirement of bond for $896,900. Note : = journal entry has been entered EX
Transcribed Image Text:Record the retirement of bond for $886,000. 2 Record the retirement of bond for $894,416. 3 Record the retirement of bond for $896,900. Note : = journal entry has been entered EX
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