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The following section is taken from Tamarisk's balance sheet at December 31, 2021. Current liabilities Interest payable Long-term liabilities $46,000

The following section is taken from Tamarisk's balance sheet at December 31, 2021. Current liabilities Interest payable Long-term liabilities $46,000

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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The following section is taken from Tamarisk's balance sheet at December 31, 2021. Current liabilities Interest payable $46,000 Long-term liabilities Bonds payable (8%, due January 1, 2025) 575,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (a) Journalize the payment of the bond interest on January 1, 2022. (b) Assume that on January 1, 2022, after paying interest, Tamarisk calls bonds having a face value of $170,000. The call price is 106. Record the redemption of the bonds. (c) 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. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation (a) Jan. 1 (b) Jan. 1 (c) Dec. 31 Debit Credit
Transcribed Image Text:The following section is taken from Tamarisk's balance sheet at December 31, 2021. Current liabilities Interest payable $46,000 Long-term liabilities Bonds payable (8%, due January 1, 2025) 575,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (a) Journalize the payment of the bond interest on January 1, 2022. (b) Assume that on January 1, 2022, after paying interest, Tamarisk calls bonds having a face value of $170,000. The call price is 106. Record the redemption of the bonds. (c) 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. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation (a) Jan. 1 (b) Jan. 1 (c) Dec. 31 Debit Credit
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