Journal entries to record retirement of old issue
Course:- Accounting Basics
Reference No.:- EM13143770

Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Accounting Basics

On June 30, 2002 Mendenhal Company issue 12% bonds with a par value of 600,000 due in 20 years. They were issued at 98 and were callabel at 104 at any date after June 30, 2010. Because of lower interest rates and significant change in the company's credit rating, it was decided to call the entire issue on June 30, 2011, 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 the retirement of the old issue and the sale of the new issue on June 30, 2011

b) Prepare the entry required on December 31, 2011 to record the payment of the first 6 months interest and the amortization of premium on the bonds

Put your comment

Ask Question & Get Answers from Experts
Browse some more (Accounting Basics) Materials
A company requires $1,020,000 in sales to meet its net income target. Its contribution margin is 30%, and fixed costs are $180,000. What is the target net income?
With the number of workers currently employed, that means that the company is committed tp paying its direct labor work force at lease 5600 hours in total each month even if
Cotton Hotel Corporation recently purchased Holiday Hotel and the land on which it is located with the plan to tear down the Holiday Hotel and build a new luxury hotel on th
Eagle Tools, Inc., the manufacturer of the gun, for product liability, on the ground of strict liability. What are the elements for an action based on strict liability? In w
Prepare a report for the board of directors on how to address the proposed funding cuts while remaining sensitive to the needs and health of the community and your patients. I
A company had net income of $242,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased $15,000 and $40,000, respectively. Prepai
purposes of the statement of cash flow, classify each of these transactions as an operating, investing, or financing activity. Additionally, indicate whether the activity is a
X-Run Inc. uses the installment-sales method in accounting for its installment sales. On January 1, 2014, X-Run had an installment account receivable from Herman Pringle wit