On January 1, 2017, the date of bond authorization, Sydney Corp. issued 3-year, 12-per cent bonds with a face value of $200,000 at 112. Semi-annual interest is payable on June 30 and December 31. Required: 1. Prepare the journal entries
1. Prepare the journal entries to record the following transactions:
a. The issuance of the bonds
b. The interest payment on June 30, 2017
c. The amortization of the premium on June 30, 2017 (use the straight-line method of amortization).
2. Calculate the amount of interest paid in cash during 2017 and the amount of interest expense that will appear in the 2017 income statement. Why are these amounts different?
3. Prepare a partial balance sheet at December 31, 2017 showing how the bonds payable and the premium on bonds should be shown on the balance sheet.
4. Prepare the journal entry on January 1, 2020 when the bonds were called at 106. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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1 a The issuance of the bonds Cash 200000 x 112 224000 2017 Jan 1 Cash 224000 Premium on Bonds 24000 …View the full answer
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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