Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On February 1 , 2 0 2 1 , Strauss - Lombardi issued 9 % bonds, dated February 1 , with a face amount

On February 1, 2021, Strauss-Lombardi issued 9% bonds, dated February 1, with a face amount of $780,000. The bonds sold for $713,083 and mature on January 31, 2041 (20 years). The market yield for bonds of similar risk and maturity was 10%. Interest is paid semiannually on July 31 and January 31. Strauss-Lombardis fiscal year ends December 31.


Required:

Prepare the journal entries to record their issuance by Strauss-Lombardi on February 1, 2021, interest on July 31, 2021 (at the effective rate), adjusting entry to accrue interest on December 31, 2021 and interest on January 31, 2022. (Do not round your intermediate calculations and round your final answers to nearest whole dollar. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)\table[[No,Date,General Journal,Debit,Credit],[1,February 01, 2021,Cash,,],[,,Discount on bonds payable,,],[,,Bonds payable,,],[2,July 31, 2021,Interest expense,,],[,,Discount on bonds payable,,],[,,Cash,,],[3,December 31, 2021,Interest expense,,],[,,Discount on bonds payable,,],[,,Interest payable,,],[4,January 31, 2022,Interest expense,,],[,,Interest payable,,],[,,Discount on bonds payable,,]]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

9th Edition

125972266X, 9781259722660

More Books

Students also viewed these Accounting questions