1. On January 1, 2017, Grouper Corporation redeemed $430,000 of bonds at 99. At the...
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1. On January 1, 2017, Grouper Corporation redeemed $430,000 of bonds at 99. At the time of redemption, the unamortized premium was $12,900. Prepare the corporations journal entry to record the reacquisition of the bonds.
2. Blossom, Inc. issued a $185,000, 4-year, 11% note at face value to Flint Hills Bank on January 1, 2017, and received $185,000 cash. The note requires annual interest payments each December 31. Prepare Blossoms journal entries to record (a) the issuance of the note and (b) the December 31 interest payment.
3. Grouper Corporation issued a 4-year, $85,000, zero-interest-bearing note to Brown Company on January 1, 2017, and received cash of $48,599. The implicit interest rate is 15%. Prepare Groupers journal entries for (a) the January 1 issuance and (b) the December 31 recognition of interest.
4. Sheffield Corporation issued a 4-year, $41,000, 4% note to Greenbush Company on January 1, 2017, and received a computer that normally sells for $31,038. The note requires annual interest payments each December 31. The market rate of interest for a note of similar risk is 12%. Prepare Sheffields journal entries for (a) the January 1 issuance and (b) the December 31 interest.
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