Reference no: EM133113222
Question - On April 1, 2020, Bridgeport Company sold 14,400 of its 11%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2021, Bridgeport took advantage of favorable prices of its stock to extinguish 4,200 of the bonds by issuing 138,600 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2021.
Required - Prepare the journal entries needed on the books of Bridgeport Company to record the following.
(a) April 1, 2020: issuance of the bonds.
(b) October 1, 2020: payment of semiannual interest.
(c) December 31, 2020: accrual of interest expense.
(d) March 1, 2021: extinguishment of 4,200 bonds. (No reversing entries made.)
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