On May 1, 2020, Herron Industries AG issued CHF600,000, 9%, 5-year bonds at face value. The bonds

Question:

On May 1, 2020, Herron Industries AG issued CHF600,000, 9%, 5-year bonds at face value. The bonds were dated May 1, 2020, and pay interest annually on May 1. Financial statements are prepared annually on December 31.

Instructions

a. Prepare the journal entry to record the issuance of the bonds.

b. Prepare the adjusting entry to record the accrual of interest on December 31, 2020.

c. Show the statement of fi nancial position presentation on December 31, 2020.

d. Prepare the journal entry to record payment of interest on May 1, 2021.

e. Prepare the adjusting entry to record the accrual of interest on December 31, 2021.

f. Assume that on January 1, 2022, Herron pays the accrued bond interest and calls the bonds at 102.

Record the payment of interest and redemption of the bonds.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...

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Related Book For answer-question

Financial Accounting with International Financial Reporting Standards

ISBN: 978-1119504306

4th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: Jul 22, 2019 12:52 PM

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On May 1, 2020, Herron Industries AG issued CHF600,000, 9%, 5-year bonds at face value. The bonds

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a 2020 May1 Cash 600000 Bonds Payable 600000 b Dec31 Interest Expense 36000 Interest Payable ...View the full answer

Financial Accounting with International Financial Reporting Standards

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