Prepare the entry required on December

Assignment Help Accounting Basics
Reference no: EM132831133

Problem - On June 30, 2012, Flounder Company issued 12% bonds with a par value of $840,000 due in 20 years. They were issued at 98 and were callable at 103 at any date after June 30, 2020. 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, 2021, and to issue new bonds. New 10% bonds were sold in the amount of $920,000 at 102; they mature in 20 years. Flounder Company uses straight-line amortization. Interest payment dates are December 31 and June 30.

Required -

(a) Prepare journal entries to record the redemption of the old issue and the sale of the new issue on June 30, 2021.

(b) Prepare the entry required on December 31, 2021, to record the payment of the first 6 months' interest and the amortization of premium on the bonds.

Reference no: EM132831133

Questions Cloud

Wired Ethernet and Wireless Ethernet : Do the MAC addresses used in an 802.3 (Wired Ethernet) and the MAC addresses in an 802.11 (Wireless Ethernet) belong to two different address spaces? Explain.
What are the consequences of the redemption : Paul's stock for $100,000. If Paul acquired the 800 shares five years ago for $40,000, what are the consequences of the redemption of the 600 shares
Managing real options with emerging technologies : Identify the emerging technologies mentioned in this paper. Describe the particular problems the technologies intended to address.
Calculate the amount peter can deduct from employment income : Calculate the amount Peter can deduct from employment income. Peter's employer requires him to use his own vehicle for work and pay all of the vehicle's
Prepare the entry required on December : Prepare the entry required on December 31, 2021, to record the payment of the first 6 months' interest and the amortization of premium on the bonds
How much money must invest at the beginning of each month : How much money must you invest at the beginning of each month over the next four years if you can earn 8.25% annual interest with monthly compounding?
What is unusual about the pods of the peanut plant : How is domesticated emmer wheat different from wild emmer and What is unusual about the pods of the peanut plant
Considering importance of data in organization : Considering the importance of data in organization, it is absolutely essential to secure the data present in the database
Calculate net income for year two : Calculate net income for Year 2. At December 31, Year 1, Lord of the Fries, Inc.'s assets were $60,000 and liabilities were $40,000.

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is nocera balance in its deferred tax asset

Nocera, Inc., earns book net income before tax of $600,000 in 2010. What is Nocera's balance in its deferred tax asset and deferred tax liability accounts

  What amount should Red report as cash

Cash in checking account P 35,0003. What amount should Red report as cash and cash equivalents in its December 31, 2017 balance sheet

  Construct a flexible budget performance report

Construct a flexible budget performance report that would be useful in assessing how well costs were controlled in this department

  What are some of the benefits organizations

What are some of the benefits organizations seek to achieve through using information systems?

  Insurance premiums of 840 for salary continuation payments

rex age 55 is an officer of blue company which provides him with the following nondiscriminatory fringe benefits in

  How much would division cs income from operations increase

How much would Division C's income from operations increase (decrease)? How much would Division A's income from operations increase (decrease)?

  What additional amount will beta have to pay to pay off

What additional amount will Beta have to pay to pay off the promissory note? How much will Beta owe after making the third annual payment?

  Determine reba federal income taxes due or taxes payable

Reba had $10,000 of federal income taxes withheld by her employer. Determine Reba's federal income taxes due or taxes payable for the current year

  Describe a nonmanufacturing business that could benefit

describe a nonmanufacturing business that could benefit from the use of standards. also explain how standards would

  How financing assists corporation in raising capital

The growth of corporations in the U.S. How financing assists corporation in raising capital and what are investors looking for when selecting an investment

  What is the advantage of using historical cost

What is the advantage of using historical cost on the balance sheet for property, plant and equipment?

  Transactions financial statements service company

(Transactions, Financial Statements-Service Company) Listed below are the transactions of Isao Aoki, D.D.S., for the month of September.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd