Prepare the journal entries needed on the books

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Reference no: EM131453389

On April 1, 2017, Kingbird Company sold 21,600 of its 10%, 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, 2018, Kingbird took advantage of favorable prices of its stock to extinguish 6,300 of the bonds by issuing 207,900 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 $31 per share on March 1, 2018.

Prepare the journal entries needed on the books of Kingbird Company to record the following

(a) April 1, 2017: issuance of the bonds.

(b) October 1, 2017: payment of semiannual interest.

(d) March 1, 2018: extinguishment of 6,300 bonds. (No reversing entries made.)

Reference no: EM131453389

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