On March 1, 2020, in order to finance the construction of a new manufacturing plant, The...

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On March 1, 2020, in order to finance the construction of a new manufacturing plant, The Smith Electronics Company received authorization to issue debentures in the amount of $180,000. These bonds had a stated interest rate of 6%, and they were expected to mature in ten years. Interest was to be paid to bondholders each February 28th and August 31st. On October 31, 2023, Smith issued one-half of the bonds for cash, at a discount of $7,600. After a change in corporate strategy and effective December 31, 2025, Smith's management decided to retire the bonds for a payment of $98,000, as well as to pay the bondholders all interest due through that date. Prepare only the journal entries required for (1) the issuance of the bonds and (2) the retirement of the bonds. 180,000 x .50 On March 1, 2020, in order to finance the construction of a new manufacturing plant, The Smith Electronics Company received authorization to issue debentures in the amount of $180,000. These bonds had a stated interest rate of 6%, and they were expected to mature in ten years. Interest was to be paid to bondholders each February 28th and August 31st. On October 31, 2023, Smith issued one-half of the bonds for cash, at a discount of $7,600. After a change in corporate strategy and effective December 31, 2025, Smith's management decided to retire the bonds for a payment of $98,000, as well as to pay the bondholders all interest due through that date. Prepare only the journal entries required for (1) the issuance of the bonds and (2) the retirement of the bonds. 180,000 x .50

Answer rating: 100% (QA)

Journal Entries for Bond Issuance 1 Cash asset 180... View the full answer