Wempe Co. sold $3,346,000, 7%, 10-year bonds on January 1, 2014. The bonds were
ID: 2498521 • Letter: W
Question
Wempe Co. sold $3,346,000, 7%, 10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually.
Prepare the journal entries to record the issuance of the bonds assuming they sold at: (1) 101 and (2) 95.
Prepare amortization tables for issuance of the bonds sold at 101 for the first three interest payments.
Prepare the journal entries to record interest expense for 2014 under both of the bond issuances assuming they sold at: (1) 101 and (2) 95.
Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 101 at December 31, 2014
Show the long-term liabilities balance sheet presentation for issuance of the bonds sold at 95 at December 31, 2014.
Please show all work, so I can have an understanding of what you done. Thank You.
Wempe Co. sold $3,346,000, 7%, 10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on January 1. The company uses straight-line amortization on bond premiums and discounts. Financial statements are prepared annually.
Explanation / Answer
Assuming face value is $100
Particulars Debit Credit 1 Cash A/c $3,346,000 33,129 To Bond payables A/c $3,312,871 To premium A/c $33,129 Cash A/c $3,346,000 35,221 Discount allowed A/c $176,105 To Bond payables A/c $3,522,105Related Questions
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