**Educational Resource: Preparing a Bond Retirement Journal Entry****Scenario Overview:**On December 31, 2017, the balance sheet of Ming Inc. included 12% bonds with a face amount of $107 million. Initially issued in 2005, these bonds had a remaining discount of $4,100,000 as of December 31, 2017. On January 1, 2018, Ming Inc. retired these bonds at a call price of 102.**Task Requirement:**Prepare the necessary journal entry to record the retirement of the bonds on January 1, 2018. If a transaction/event does not require an entry, indicate by selecting "No journal entry required." Ensure to enter amounts in whole dollars.**Instructional Notes:**- Enter debits before credits when making a journal entry.- The specified call price of 102 indicates a premium of 2% over the face value, implying a payout of $109.14 million ($107 million * 102/100).**Journal Entry Worksheet:***Record the retirement of the bonds on January 1, 2018.*| Date | General Journal | Debit | Credit ||---------------|-------------------------|--------------|--------------|| January 01, 2018 | [To be filled by student] | [To be filled by student] | [To be filled by student] |*Action Items:*1. Calculate the total amount to be paid at the call price.2. Consider the bond discount in the accounting records to determine the correct entries.3. Record the bond retirement transaction accurately by entering it in the "General Journal" columns.**Interactive Features:**- Utilize the “Record entry” button to submit your journal entry.- The “Clear entry” button is available to reset your input fields.- Access a comprehensive review by selecting “View general journal” after completing the entry.

Solution: Journal entry is as under: Particulars Debit Credit Bond payable 107000000 Loss…

Answered: The December 31, 2017, balance sheet of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

I could use some help with filling this out
On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. A) $73,000. B) $82,000. C) $87,000. D) $89,000.
Simko Company issued $600,000, 10-year, 5 percent bonds on January 1, 2015. The bonds wereissued for $580,000. Interest is payable annually on December 31. Using straight-line amortization, prepare journal entries to record ( a ) the bond issuance on January 1, 2015, and ( b ) the payment of interest on December 31, 2015.
Tamarisk Ltd. issued a $1,076,000, 10-year bond dated January 1, 2023. The bond was sold at 98.8% interest was payable on the bond on January 1 and July 1 each year. The company's year-end was December 31, and Tamarisk followed ASPE, and chose to use the straight-line amortization method. Prepare the journal entries for the given dates. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem. List all debit entries before credit entries.) Date || | | Account Titles and Explanation Debit Credit ||
Hawar Company issued $400,000 of bonds on January 1, 2020. Required: Prepare the journal entry to record the redemption of the bonds before maturity at 97. Assume the balance in Premium on Bonds Payable is $4,000. For the toolbar presS ALT+F10 (PC) or ALT+EN+F10 (Mac)
Novak Corp. redeemed $148,000 face value, 12% bonds on April 30, 2022, at 102. The carrying value of the bonds at the redemption date was $134,500. The bonds pay annual interest, and the interest payment due on April 30, 2022, has been made and recorded. Prepare the appropriate journal entry for the redemption of the bonds.
Hiu Wang Company sold $55,000,000, 8%, 10-year bonds on January 1, 2020. The bonds apply interest on July 1 and January 1. HWC uses the straight-line method to amortize bond premium or discount. Assume no interest accrued on June 30. Prepare all the necessary journal entries to record the issuance of the bonds and bond interest happens for 2020, assuming that the bonds sold at 105. Prepare journal entries as in part (1) assuming that the bond sold at 98. Show statement of financial position presentation for each bond issued at December 31, 2020.
The Colson Company issued $300.000 bonds at 98 on January 1, 2017. The bonds are due January 1, 2022. with interest payable each July 1. and January 1. The Colson Company records Straight Line amortization semiannually Prepare Colson's Journal entry for December 31 O Interest Expense Discount on Bonds Payable interest Payable O nterest Expense Discount on Bonds Payable KCash O nterest Payable $15 600 S600 $15.000 $15.600 $600 $15.000 $15.600 Discount on Bonds Payable Interest Expense 6 nterest Expense Discount on Bonds Payable nterest Expense $600 $15 000 $15 600 S600 $15.000
The December 31, 2021 balance sheet of Blossom Co. included the following items: 7.5% bonds payable due December 31, 2029 Unamortized discount on bonds payable The bonds were issued on December 31, 2019 at 95, with interest payable on June 30 and December 31. (Use straight-line amortization.) On April 1, 2020, Wolfe retired $732,000 of these bonds at 101 plus accrued interest. Prepare journal entries to record the above retirement. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Apr. 1 Apr. 1 Account Titles and Explanation Interest Expense Discount on Bonds Payable Cash $3,660,000 146,400 (To record interest and discount on bonds) Bonds Payable Loss on Redemption of Bonds Discount on Bonds Payable Cash Debit Credit
On January 1, 2018, Paradiso Company issued 1,000 of its 8%, $1,000 bonds at 93. Interest is payable semiannually on June 30 and December 31. The bonds will mature on December 31, 2027. If the company uses straight-line amortization, determine the amount of interest expense for 2018. answer is 87,000 how do you get there?
Hasley Company issued $800,000, 11%, 10-year bonds on December 31, 2018, for $730,000. Interest is payable annually on December 31.The Company uses the straight-line method to amortize bond premium or discount. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Prepare the journal entry to record the payment of interest and the discount amortization on December 31, 2019. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Prepare the journal entry to record the redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
On August 1, 2022, Bramble Corp. issued $482,400, 8%, 10-year bonds at face value. Interest is payable annually on August 1. Bramble’s year-end is December 31. Prepare the journal entry to record the issuance of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Aug. 1 enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount enter an account title to record the issuance of the bonds on August 1 enter a debit amount enter a credit amount eTextbook and Media List of Accounts Prepare the journal entry to record the accrual of interest on December 31, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Dec. 31 enter an…

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS