Explain why the issuing corporation charged it bond investor

Assignment Help Financial Accounting

Reference no: EM13142440

On March 31, 2011, Gardner Corporation received authorization to issue $ 50,000 of 9 percent, 30- year bonds payable. The bonds pay interest on March 31 and September 30. The entire issue was dated March 31, 2011, but the bonds were not issued until April 30, 2011. They were issued at face value.

a. Prepare the journal entry at April 30, 2011, to record the sale of the bonds.

b. Prepare the journal entry at September 30, 2011, to record the semiannual bond interest payment.

c. Prepare the adjusting entry at December 31, 2011, to record bond interest expense accrued since September 30, 2011. ( Assume that no monthly adjusting entries to accrue interest expense had been made prior to December 31, 2011.)

d. Explain why the issuing corporation charged its bond investors for interest accrued in April 2011, prior to the issuance date ( see part b above).

Reference no: EM13142440

Questions Cloud

Is an increase in your bank statement a debit or a credit : Is an increase in your bank statement a debit or a credit? What method would you use to summarize transactions and transfer to the ledger?

Calulate the critical value of ra : Calulate the critical value of ra. (f) Can you reject p = 0? 12.4 Moviegoer Spending ($) on Snacks Age (X) 30,50,34,12,37,33,36,26,18,46. Spent (Y) 2.85,6.50,1.50,6.35,6.20,6.75,3.60,6.10,8.35,4.35.'

Why is situation the operating lease : Would it be acceptable for a company to account for a capital lease as an operating lease to report rent expense rather than a long- term liability?

Comparative advantages and disadvantages of ideal : Explain the following in a memo to your instructor. The comparative advantages and disadvantages of ideal versus normal standards.

Explain why the issuing corporation charged it bond investor : Explain why the issuing corporation charged its bond investors for interest accrued in April 2011, prior to the issuance date ( see part b above).

Probability that both professors are chemistry professors : If each professor has an equal chance of being selected, what is the probability that both professors are chemistry professors?

Basics of cost recovery deduction : On May 15, 2009, Brent purchased new farm equipment for $40,000. Brent used the equipment in connection with his farming business. Brent does not elect to expense assets under § 179. Brent does elect not to take additional first-year depreciation...

Design an enrichment medium to isolate : Design an enrichment medium to isolate a detergent-degrading bacterium that is found in soil.

Determining actual level of activity achieved : A department has budgeted monthly manufacturing overhead cost of $270,000 plus $3 per direct labor hour. If a flexible budget report reflects $522,000 for total budgeted manufacturing cost for the month, the actual level of activity achieved durin..

User Account

All Pages