The following section is taken from Ohlman Ltd.s. statement of financial position at December 31, 2019. Non-current
Question:
The following section is taken from Ohlman Ltd.’s. statement of financial position at December 31, 2019.
Non-current liabilities
Bonds payable, 7%, due January 1, 2024 ................................................HK$16,000,000
Current liabilities
Interest payable ...................................................................................................1,120,000
Bond interest is payable annually on January 1. The bonds are callable on any interest date.
Instructions
a. Journalize the payment of the bond interest on January 1, 2020.
b. Assume that on January 1, 2020, after paying interest, Ohlman calls bonds having a face value of HK$6,000,000. The call price is 103. Record the redemption of the bonds.
c. Prepare the entry to record the accrual of interest on December 31, 2020.
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...
Step by Step Answer:
a Jan 1 Interest Payable 1120000 Cash 1120000 b Jan 1 Bonds P...View the full answer
Accounting Principles
ISBN: 978-1119419617
IFRS global edition
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
