The following section is taken from Ivanhoe's balance sheet at December 31, Current liabilities Interest payable Long-term liabilities Bonds payable (8%, due January 1, 2025) (a) (b) $ 47,500 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (c) 575,000 Journalize the payment of the bond interest on January 1, 2022. Assume that on January 1, 2022, after paying interest, Ivanhoe calls bonds having a face value of $170,000. The call price is 106. Record the redemption of the bonds. Prepare the adjusting entry on December 31, 2022, to accrue the interest on the remaining bonds.
The following section is taken from Ivanhoe's balance sheet at December 31, Current liabilities Interest payable Long-term liabilities Bonds payable (8%, due January 1, 2025) (a) (b) $ 47,500 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (c) 575,000 Journalize the payment of the bond interest on January 1, 2022. Assume that on January 1, 2022, after paying interest, Ivanhoe calls bonds having a face value of $170,000. The call price is 106. Record the redemption of the bonds. Prepare the adjusting entry on December 31, 2022, to accrue the interest on the remaining bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:The following section is taken from Ivanhoe's balance sheet at December 31, 2021.
Current liabilities
Interest payable
Long-term liabilities
Bonds payable (8%, due January 1, 2025)
Interest is payable annually on January 1. The bonds are callable on any annual interest date.
(c)
(a) Journalize the payment of the bond interest on January 1, 2022.
(b)
Assume that on January 1, 2022, after paying interest, Ivanhoe calls bonds having a face value of $170,000.
The call price is 106. Record the redemption of the bonds.
Prepare the adjusting entry on December 31, 2022, to accrue the interest on the remaining bonds.
(Credit account titles are automatically indented when amount is entered. Do not indent manually.)
(a)
$ 47,500
No. Date Account Titles and Explanation
Jan.
1
(b)
575,000
(c)
Jan.
1
Dec.
31
Debit
Credi
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