70.2K

Verified Solution

Link Copied!

May 1, 2025 Bonds payable with a par value of $900,000.00, which are dated January 1,2025 , are sold at 106 plus accrued interest. They are coupon bonds, bear interest at 12\% (payable annually at January 1), and mature January 1, 2035. (Use the Interest Expense account for accrued interest.) Dec. 31, Adjusting entries are made to record the accrued interest on the bonds, and the amortization of the proper amount 2025 of premium. (Use straight-line amortization.) Jan. 1, 2026 Interest on the bonds is paid. April 1, Bonds with par value of $360,000.00 are called at 102 plus accrued interest, and redeemed. (Bond premium is to 2026 be amortized only at the end of each year.) Dec. 31, Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium 2026 amortized. Prepare journal entries for the transactions above. (Do not round intermediate calculations. Round answers to 2 decimal places, e.g. 38,548.24. Record entries in the order displayed in the problem statement. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Answer & Explanation Solved by verified expert

See Answer