March 1 2014 pynchon issued 400000 face value 8 bonds dated

Assignment Help Financial Accounting

Reference no: EM13352047

March 1, 2014: Pynchon issued $400,000 face value, 8% bonds, dated 1^st December, 2013, for $437,000, including accrued interest which is shown as interest expense on 3/1/2014. In addition, bond issue costs amounted to $2,900, which are not added in the $437,000. Interest is payable semiannually on December 1 and June 1 with the bonds maturing 10 years from the past 1^st December, 2013. Straight-line amortization is used for bond issue costs amortization and any bond premium. Bond issue costs are only amortized on 31^st December of each year. The bonds are callable at 102.

1^st December, 2014: Paid the semiannual interest on Pynchon amortized the bond and Apparel bonds issue costs. Pynchon consequently purchased $200,000 face value bonds at the call price.

-->Interest Payment - Record for all $400,000 of the Bonds Payable

-->Amortization of Bond Issue Costs - Record for all $400,000 of the Bonds Payable

--->Purchase of $200,000 Callable Bonds Payable

Required:

Prepare the essential journal entries to record the subsequent transactions relating to the long-term issuance of bonds payable of Pynchon Apparel.

Reference no: EM13352047

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