Prepare journal entries for the transactions

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Reference no: EM132715420

Question: Presented below are transactions on the books of Simon Company.

07/01/2019: Bonds payable with a par value of $900,000, which are dated January 1, 2019, are sold at 112.290 plus accrued interest to yield 10%. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature January 1, 2029. (Use "Interest Expense" account for accrued interest.)

12/31/2019: Adjusting entries are made to record the (1) accrued interest on the bonds, and (2) amortization of the proper amount of premium or discount.

01/01/2020: Interest on the bonds is paid.

01/02/2020: Bonds of par value of $360,000 are called at 102 and extinguished.

12/31/2020: Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.

Required: Prepare journal entries for the transactions above, assuming reversing entries are not made at the beginning of each year. Round off amounts to nearest centavo.

Reference no: EM132715420

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