2. On February 1, 2021, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable...

 

Transcribed Image Text:

2. On February 1, 2021, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable semiannually on January 31 and July 31 with the bonds maturing on February 1, 2030 (10-year bonds). The bonds are callable at 103. On February 1, 2022, Mojito retired $800,000 of the bonds at the call price. Required: a. Prepare the journal entry for the issuance of the bonds b. Prepare any required journal entries for interest payments on July 31, 2021 and January 31, 2022. Mojito uses straight-line amortization to amortize any discount or premium. c. Prepare the required entry to record the retirement of the bonds on February 1, 2022. 2. On February 1, 2021, Mojito, Inc. issued $2,000,000, 5% bonds for $2,165,000. Interest is payable semiannually on January 31 and July 31 with the bonds maturing on February 1, 2030 (10-year bonds). The bonds are callable at 103. On February 1, 2022, Mojito retired $800,000 of the bonds at the call price. Required: a. Prepare the journal entry for the issuance of the bonds b. Prepare any required journal entries for interest payments on July 31, 2021 and January 31, 2022. Mojito uses straight-line amortization to amortize any discount or premium. c. Prepare the required entry to record the retirement of the bonds on February 1, 2022.

Answer rating: 100% (QA)

Expert Answer General Guidance The answer provided below ... View the full answer