Exercise 10-12 Assume that the following are Independent s tuatlons recently rep
ID: 2510976 • Letter: E
Question
Exercise 10-12 Assume that the following are Independent s tuatlons recently reported In the Wall Street Journa! 1. General Electric (GE) 7% bonds, maturing January 28, 2018, were issued at 111.80. 2. Boeing 7% bonds, maturing Septermber 24, 2032, were issued at 98.90. Were GE and Boeing bonds Issued at a premlum or a discount? The General Electric bonds were issued at a and the Boeing bonds were issued at a LIST OF ACCOUNTS Prepare the ournal entry to record the Issue of each af these two boncs, assuming each company Issued $780,000 of bonds In total. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No, Account Titles and Explanation Debit CreditExplanation / Answer
Answer:-
(a).
The General Electric bonds were issued at a Premium and the Boeing bonds were issued at a Discount
(b).
No.
Particular
Debit
Credit
1.
Cash($ 780,000*111.80%)
872,040
Bonds Payable
$780,000
Premium on Bonds Payable
$92,040
2.
Cash($ 780,000*98.90%)
$771,420
Discount on Bonds Payable
$8,580
Bonds Payable
$780,000
No.
Particular
Debit
Credit
1.
Cash($ 780,000*111.80%)
872,040
Bonds Payable
$780,000
Premium on Bonds Payable
$92,040
2.
Cash($ 780,000*98.90%)
$771,420
Discount on Bonds Payable
$8,580
Bonds Payable
$780,000
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