On March 1, 2017, Blossom Company sold 23,000 of its 7%, 20-year, $1,000 face value bonds at
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On March 1, 2017, Blossom Company sold 23,000 of its 7%, 20-year, $1,000 face value bonds at 96. Interest payment dates are March 1 and September 1, and the company uses the straight-line method of bond discount amortization. On February 1, 2018, Blossom took advantage of favorable prices of its stock to extinguish 2,750 of the bonds by issuing 149,000 shares of its $1 par value common stock. At this time, the accrued interest was paid in cash. The company’s stock was selling for $19.25 per share on February 1, 2018.
Prepare the journal entries needed on the books of Sheridan Company to record the following.
(a) | March 1, 2017: issuance of the bonds. | |
(b) | September 1, 2017: payment of semiannual interest. | |
(c) | December 31, 2017: accrual of interest expense. | |
(d) | February 1, 2018: extinguishment of 3,130 bonds. (No reversing entries made.) |
Related Book For
Intermediate Accounting Reporting and Analysis
ISBN: 978-1285453828
2nd edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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