Journalize the following transactions of Fayuz Communications Inc.: 2020 Jan. 2 Issued $8,000,000 of 7 percent, 10-year
Question:
Journalize the following transactions of Fayuz Communications Inc.:
2020
Jan. 2 Issued $8,000,000 of 7 percent, 10-year bonds payable at 97.00.
2 Signed a five-year capital lease on machinery. The agreement requires annual lease payments of $80,000, with the first payment due immediately. The present value of the five lease payments is $333,589, using a market rate of 10 percent.
Jul. 2 Paid semi-annual interest and amortized the discount by the straightline method on the 7 percent bonds payable.
Dec. 31 Accrued semi-annual interest expense and amortized the discount by the straight-line method on the 7 percent bonds.
31 Recorded amortization on the leased machinery using the straight-line method.
31 Accrued interest expense at 10 percent on the lease liability.
2030
Jan. 2 Paid the 7 percent bonds at maturity. Ignore the final interest payment.
Step by Step Answer:
Horngrens Accounting
ISBN: 9780135359785
11th Canadian Edition Volume 2
Authors: Tracie Miller Nobles, Brenda Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo Ann Johnston, Peter R. Norwood