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Spring Fit corporation

You are an accounting intern working for SpringfitbCorporation. You have recently been assigned to help one of the accountants who is doing an internal audit of the business. You will be assisting with a review of the payables issued by springfit corporation. Your first task is to review the previous years journal entries, shown as follows:

pournal Entries, Year 1 Journal Date Jan. 1 Credit Description Cash Premium on Bonds Payable Bonds Payable Debit 1,062,060 62,060 1,000,000 Jun 30 Interest Expense Premium on Bonds Payable Cash 19,397 3,103 22,500 Jul 1 Cash Discount on Bonds Payable Bonds Payable 1,585,068 64,932 1,650,000 Dec. 31 Interest Expense Premium on Bonds Payable Cash 19,397 3,103 22,500 34.286 Interest Expense Discount on Bonds Payable Cash 5,411 25,875 73,080 Retained Earnings Interest Expense 73,080 Bonds Payable Review the journal entries on the Springfit Corporation panel, the answer the following question, 1. Assuming that no bonds had been issued prior to year 1. how many different bonds appear in the journal entes for this year? 2. Which entry shows bonds issued at a contract at lower than the mucket rate of interest Choose the date. 3. How much interest was paid during the year on the bonds in question (2) 4. What is the carrying incunt of the bonds in question (2) at the end of the Year 5 Which entry shows bonds that sold for more than their chi Choose the date 6. How much interest was paid during the year on the bonds in question (5) 7. Assuming that used for the bonde in question (5) What is the bond the of the bends in ton at the the Journal Entries, Year 2 You have been asked to continue your work on the Springfit Corporation audit. The journal entries for the current year are shown as followest Journal Date Description Debit Credit Sun, 30 Interest Expense 19,397 Premium on Bonds Payable 3,103 Cash 22,500 30 Interest Expense Discount on Bonds Payable 34,286 5,411 28,825 30 1.650,000 Bonds Payable Gain on Redemption of Bonds Discount on Bonds Payable Cash 41,000 54,110 1554 890 Dec 31 Interest Expense Premium on Bonds Payable 19,397 3.103 22.500 21 Betined on Interest Expert 73,080 23.080 Body 500,000 Final Questions Considering the journal entries for both years, answer the following questions 1. Were the bonds in the entry on Dec 31 of Year 2 redeemed at maturity? 2. You suspect there is an error in one of the bond redemption entries. Assuming that the amounts are correct, which entry is questionable Why 3. Why do some bond sell below roce value 4. Which of the following items are amortised Bonds 6. Discounts d. Redemtunt

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