BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN Ellis & Co. issued the following bonds at

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BONDS ISSUED AT A DISCOUNT, REDEEMED AT A GAIN Ellis & Co. issued the following bonds at a discount:

Date of issue and sale: .....April 1, 20-1

Principal amount: .......$400,000

Sale price of bonds: ......97

Denomination of bonds: .....$1,000

Life of bonds: .........10 years

Stated rate: ..........8%, payable semiannually on

...............September 30 and March 31

REQUIRED

Prepare journal entries for:

(a) Issuance of the bonds.

(b) Interest payment and discount amortization on the bonds on September 30, 20-1.

(c) Year-end adjustment on the bonds for 20-1.

(d) Reversing entry for the beginning of 20-2.

(e) Redemption of $50,000 of the bonds on April 1, 20-4, at 96.

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College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

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