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Record the payment of interest and redemption of bonds

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Reference no: EM132532427

April 1st, 2019, Candy Corp issued $1,400,000, 5%, 10 year bonds at face value. The bonds were dated April 1st 2019 and paid interest annually on April 1st. Financial Statements are prepared annually on December 31st.

Instructions:

Question a) Prepare the journal entry to record the issuance of the bonds.

Question b) Prepare the adjusting entry to the accrual of interest on December 31st 2019.

Question c) Show the balance sheet presentation of bonds payable and bonds interest payable on December 31st 2019.

Question d) Prepare the journal entry to record the payment of interest on April 1st 2020.

Question e) Prepare the adjusting the accrual of interest on December 31st 2020.

Question f) Assume that on January 1st 2021, Candy pays the accrued bond interest and calls the bonds. The call price is 208. Record the payment of interest and redemption of the bonds.

Reference no: EM132532427

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