Use the following to answer Q$18$ to Q$20$:

On January $1,2022,$ OkiDokes Corp. issued $2,000$ of its $$1,000$ face$-$value debentures at $103$ due on January $1,2027.$ Interest payment dates are January $1$ and July $1$ of each year. The bonds have an interest rate of $12\%.$ The company has adopted ASPE and the bonds are being amortized on a straight$-$line basis over the $5$ years. Legal and issuance costs of $$200,000$ incurred are also being deferred and amortized on a straight$-$line basis with the bonds.

The journal entry prepared on January $1,2022$ is:

Question $18$Answer

a$.$

$($dr$)$ cash $$1,860,000$; $($cr$)$ bond payable $$1,860,000$

b$.$

$($dr$)$ cash $$2,260,000$; $($cr$)$ bond payable $$2,260,000$

c$.$

$($dr$)$ cash $$2,060,000$; $($cr$)$ bond payable $$2,060,000$

d$.$

None

e$.$

$($dr$)$ cash $$1,860,000$; $($dr$)$ bond issuance cost $$200,000$; $($cr$)$ bond payable $$2,060,000$

Question $19$

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The journal entry prepared for the interest payment and amortization on July $1,2024$ is:

Question $19$Answer

a$.$

$($dr$)$ interest expense $$134,000$; $($cr$)$ bond payable $$14,000$; $($cr$)$ cash $$120,000$

b$.$

$($dr$)$ interest expense $$114,000$; $($dr$)$ bond payable $$6,000$; $($cr$)$ cash $$120,000$

c$.$

$($dr$)$ interest expense $$228,000$; $($dr$)$ bond payable $$12,000$; $($cr$)$ cash $$240,000$

d$.$

$($dr$)$ interest expense $$94,000$; $($dr$)$ bond payable $$26,000$; $($cr$)$ cash $$120,000$

e$.$

None

Question $20$

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Marked out of $2\mathrm{.}00$

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The bonds are callable at $114$ of the face value, and on January $1,2025$ OkiDokes Corp. called and retired all the bonds. What is the journal entry recorded for the bond retirement. Assume on January $1,2025$ interest payment and amortization had already been recorded.

Question $20$Answer

a$.$

None

b$.$

$($dr$)$ bonds payable $$2,000,000$; $($dr$)$ loss on redemption of bonds $$280,000$; $($cr$)$ cash $$2,280,000$

c$.$

$($dr$)$ bonds payable $$2,104,000$; $($dr$)$ loss on redemption of bonds $$176,000$; $($cr$)$ cash $$2,280,000$

d$.$

$($dr$)$ bonds payable $$2,024,000$; $($dr$)$ loss on redemption of bonds $$256,000$; $($cr$)$ cash $$2,280,000$

e$.$

$($dr$)$ bonds payable $$1,944,000$; $($dr$)$ loss on redemp