The following section is taken from Swifty Corporation’s balance sheet at December 31, 2021. Current liabilities Interest payable $ 136,400 Long-term liabilities Bonds payable, 8%, due January 1, 2024 1,705,000 Bond interest is payable annually on January 1. The bonds are callable on any interest date. (a) Journalize the payment of the bond interest on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record the payment of the bond interest on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the payment of the bond interest on January 1, 2022 enter a debit amount enter a credit amount (b) Assume that on January 1, 2022, after paying interest, Swifty calls bonds having a face value of $549,500. The call price is 104. Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount (c) Prepare the 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 account title to record the accrual of interest on December 31, 2022 enter a debit amount enter a credit amount enter an account title to record the accrual of interest on December 31, 2022 enter a debit amount

The following section is taken from Swifty Corporation’s balance sheet at December 31, 2021. Current liabilities Interest payable $ 136,400 Long-term liabilities Bonds payable, 8%, due January 1, 2024 1,705,000 Bond interest is payable annually on January 1. The bonds are callable on any interest date. (a) Journalize the payment of the bond interest on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record the payment of the bond interest on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the payment of the bond interest on January 1, 2022 enter a debit amount enter a credit amount (b) Assume that on January 1, 2022, after paying interest, Swifty calls bonds having a face value of $549,500. The call price is 104. Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan. 1 enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount enter an account title to record the redemption of the bonds on January 1, 2022 enter a debit amount enter a credit amount (c) Prepare the 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 account title to record the accrual of interest on December 31, 2022 enter a debit amount enter a credit amount enter an account title to record the accrual of interest on December 31, 2022 enter a debit amount

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 following section is taken from Swifty Corporation’s balance sheet at December 31, 2021.

Current liabilities
Interest payable		$ 136,400
Long-term liabilities
Bonds payable, 8%, due January 1, 2024		1,705,000

Bond interest is payable annually on January 1. The bonds are callable on any interest date.

(a)

Journalize the payment of the bond interest on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	enter an account title to record the payment of the bond interest on January 1, 2022	enter a debit amount	enter a credit amount
	enter an account title to record the payment of the bond interest on January 1, 2022	enter a debit amount	enter a credit amount

(b)

Assume that on January 1, 2022, after paying interest, Swifty calls bonds having a face value of $549,500. The call price is 104. Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Jan. 1	enter an account title to record the redemption of the bonds on January 1, 2022	enter a debit amount	enter a credit amount
	enter an account title to record the redemption of the bonds on January 1, 2022	enter a debit amount	enter a credit amount
	enter an account title to record the redemption of the bonds on January 1, 2022	enter a debit amount	enter a credit amount

(c)

Prepare the 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 account title to record the accrual of interest on December 31, 2022	enter a debit amount	enter a credit amount
	enter an account title to record the accrual of interest on December 31, 2022	enter a debit amount

The following section is taken from Swifty Corporation's balance sheet at December 31, 2021.
Current liabilities
Interest payable
$ 136,400
Long-term liabilities
Bonds payable, 8%, due January 1, 2024
1,705,000
Bond interest is payable annually on January 1. The bonds are callable on any interest date.
(a)
Journalize the payment of the bond interest on January 1, 2022. (Credit account titles are automatically indented when amount is
entered. Do not indent manually.)
Date Account Titles and Explanation
Debit
Credit
Jan. 1
(b)
Assume that on January 1, 2022, after paying interest, Swifty calls bonds having a face value of $549,500. The call price is 104.

Assume that on January 1, 2022, after paying interest, Swifty calls bonds having a face value of $549,500. The call price is 104.
Record the redemption of the bonds. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Date Account Titles and Explanation
Debit
Credit
Jan. 1
(c)
Prepare the 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

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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