Prepare journal entries to record

Reference no: EM13124941

On June 30, 2004, Mendenhal Company issued 12% bonds with a par value of $600,000 due in 20 years. They were issued at 98 and were callable at 104 at any date after June 30, 2012. Because of lower interest rates and a significant change in the company's credit rating, it was decided to call the entire issue on June 30, 2013, and to issue new bonds. New 10% bonds were sold in the amount of $800,000 at 102; they mature in 20 years. Mendenhal Company uses straight-line amortization. Interest payment dates are December 31 and June 30.

(a) Prepare journal entries to record (1) the retirement of the old issue and (2) the sale of the new issue on June 30, 2013.

(b) Prepare the entry required on December 31, 2013, to record the payment of the first 6 months' interest and the amortization of premium on the bonds.

Reference no: EM13124941

Questions Cloud

Computing the gain or loss for commercial substance : Peanut corporation exchanged land and cash of $6,500 for equipment. the land had a book value of $45,000 and a fair value of $34,000. assume the exchange has commercial substance. compute the gain or loss?

How much is the additional revenue to be charged : A company estimates that ordering costs are $2.00 per order, picking costs are $1.00 per unique item ordered, packing costs are $0.07 per item, and return costs are $40.00 per return. A customer orders $8,000 worth of goods with direct costs of $6..

Find out how much additional profit could the company have : Fill in the data in the above chart to find out how much additional profit could the company have generated in 2010 if it had made optimal decisions at split-off?

Capital stock and retained earnings account : The balances in Salza Company's capital stock and retained earnings account on the date of acquisition were $1,200,000 and $600,000 respectively.

Prepare journal entries to record : Prepare the entry required on December 31, 2013, to record the payment of the first 6 months' interest and the amortization of premium on the bonds.

Cost of goods manufactured for particular month : The actual manufacturing overhead cost incurred was $54,000. The manufacturing overhead cost applied to Work in Process was $58,000. The cost of goods manufactured for September was?

Complete exhausting of account : You have deposited $8,369 in a special account that has a guaranteed interest rate of 13% per year. If you are willing to completely exhaust the account, what is the maximum amount that you could withdraw at the end of each of the next 8 years?

Real or imagined : As literary enthusiasts and critics, each member of the literary club is also a writer. During this week's discussion, you will be working on development of a new character and plan to share with the group.

System of linear inequalities by graphing : Solve the following system of linear inequalities by graphing.

User Account

All Pages