Reference no: EM132767278

DEBT FINANCING: "On October 1,2020, Vroom secured a 20,000 line of credit from the bank, interest was charged at a floating interest rate on the amount borrowed. On October 6, 2020, Vroom borrowed $11,000 on the line of credit. On October 31, 2020, Vroom repaid $6000 on the line of credit and $41 for all of the accrued interest for the month of October. At fiscal year end, Vroom had accrued $21 of interest for the month of November.

• Vroom issued 35, six per cent, five year bonds on April 1 2020 in exchange for $38,144. The coupon was distributed semi-annually on April 1 and October 1. At the time the bonds were issued, the market interest rate was four per cent. At fiscal year end, the market interest rate had decreased to three per cent.

• On February 15, 2019, Vroom issued 45 callable ten-year bonds. The bonds paid annual coupon rate of five per cent that was distributed semi-annually on February 15 and August 15. At the time the bonds were issued, the market interest rate was seven per cent. Vroom recalled one hundred per cent of the outstanding bonds on September 1, 2020 when the market interest rate was eight per cent."

Problem 1: Calculate and explain the adjusting entries or any entries would have to make for this section of a case?