Answered: The December 31, 2021 balance sheet of…

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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Question

The December 31, 2021 balance sheet of Kingbird Co. included the following items:

7.5% bonds payable due December 31, 2029		$3,540,000
Unamortized discount on bonds payable		141,600

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 $708,000 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 0 for the amounts.)

Date	Account Titles and Explanation	Debit	Credit
Apr. 1


	(To record interest and discount on bonds)
Apr. 1

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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