Question 6 Asquith Electric sold $505,000, 15%, 10-year bonds on January 1, 2014
ID: 2424068 • Letter: Q
Question
Question 6
Asquith Electric sold $505,000, 15%, 10-year bonds on January 1, 2014. The bonds were dated January 1 and paid interest on January 1 and July 1. The bonds were sold at 103.
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2014
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Asquith Electric
Balance Sheet
December 31, 2014
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Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2016
Question 6
Asquith Electric sold $505,000, 15%, 10-year bonds on January 1, 2014. The bonds were dated January 1 and paid interest on January 1 and July 1. The bonds were sold at 103.
Explanation / Answer
Asquith Electric Details Amt $ Bond Par value 505,000.00 Bond Issue Value 520,150.00 Bond Premium 15,150.00 Maturity period 10.00 years Half yearly Interest @7.5% 37,875.00 Half yearly Premium Amortization on SL basis 757.50 Bond Premum A/C Value Dec 31.2014. 13,635.00 Bond Premum A/C Value Jan 1.2016. 12,120.00 Bond carrying Value on Jan 1.2016. 517,120.00 Bond redemption amount @104 525,200.00 Redemption Loss 8,080.00 Journal Entries Date Account Title Dr $ Cr $ Jan 1.2014. Cash 520,150.00 Bond Payable 505,000.00 Premium on Bond Payable 15,150.00 Asquith Electric Balance sheet Partial Liabilities Amt $ Long term Liabilities Bond Payable 505,000.00 Premium on Bond Payable 13,635.00 Current Laibilities Accrued Interest Payable -Bond 37,875.00 Journal Entries Date Account Title Dr $ Cr $ Jan 1.201. Bond Payable 505,000.00 Premium on Bond Payable 12,120.00 Cash 525,200.00 Loss on Bond redemption 8,080.00
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