On January 1, 2017, Chilton Ltd. issued $500,000 of 5%, 5-year bonds. The bonds were issued to
Question:
On January 1, 2017, Chilton Ltd. issued $500,000 of 5%, 5-year bonds. The bonds were issued to yield a market interest rate of 6%. Chilton's year end is December 31. On January 1, 2019, immediately after making and recording the semi-annual interest payment, Chilton redeemed the bonds. A partial bond amortization schedule is presented below.
Instructions
(a) Prepare the journal entry to record the payment of interest on July 1, 2017.
(b) Prepare the journal entry to accrue the interest expense on December 31, 2017.
(c) Prepare the journal entry to record the payment of interest on January 1, 2018.
(d) Prepare the journal entry to record the redemption of the bonds assuming they were redeemed at 100 on January 1, 2019.
(e) Prepare the journal entry to record the red emption of the bonds assuming they were redeemed at 96.
Step by Step Answer:
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak