80.2K

Verified Solution

Link Copied!

Okano Medical Lab issued $300,000 in bonds at face value 10 years ago and has paid semiannual interest payments through the years.

(a)	Assume the bonds are redeemed at face value.
(b)	Assume that $25,000 of the bonds are redeemed at 103.
(c)	Assume that $25,000 of the bonds are redeemed at 97.

Required:

Prepare the journal entries to record (a), (b), and (c).

CHART OF ACCOUNTSOkano Medical LabGeneral Ledger

	ASSETS
101	Cash
122	Accounts Receivable
141	Supplies
181	Office Equipment

	LIABILITIES
202	Accounts Payable
219	Wages Payable
252	Bonds Payable

	EQUITY
321	Common Stock
322	Paid-In Capital in Excess of Par-Common Stock
329	Paid-In Capital from Sale of Treasury Stock
331	Retained Earnings
333	Cash Dividends

	REVENUE
401	Sales
417	Gain on Bonds Redeemed

	EXPENSES
511	Wages Expense
512	Advertising Expense
513	Bank Credit Card Expense
514	Store Supplies Expense
515	Travel and Entertainment Expense
549	Miscellaneous Expense
554	Loss on Bonds Redeemed

Prepare the journal entries to record (a), (b), and (c) on December 31.

(a) Assume the bonds are redeemed at face value.

General Journal Instructions

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2

(b) Assume that $25,000 of the bonds are redeemed at 103.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3

(C) Assume that $25,000 of the bonds are redeemed at 97.

PAGE 1

GENERAL JOURNAL

	DATE	ACCOUNT TITLE	POST. REF.	DEBIT	CREDIT
1
2
3

Answer & Explanation Solved by verified expert

See Answer