p10-7A Saberhagen Company sold $3,500,000, 896, 10-year bonds on January 1, 2017
ID: 2518128 • Letter: P
Question
p10-7A Saberhagen Company sold $3,500,000, 896, 10-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and pa Company uses the straight-line methadt Instructions (a) Prepare all the necessary journal entries to record the issuance of the bonds and bond rtize bond premium or discount. interest expense for 2017, assuming that the bonds sold at 104. (b) Prepare journal entries as in part (a) assuming that the bonds sold at 98. (c) Show balance sheet presentation for the bonds at December 31, 2017, for both the requirements in (a) and (b).Explanation / Answer
a) Journal entry :
b) Journal entry :
c) Balance sheet presentation :
Date accounts & explanation debit credit Jan 1,2017 Cash (3500000*1.04) 3640000 Bonds payable 3500000 Premium on bonds payable 140000 (To record issue bonds payable) Dec 31,2017 Interest expense 266000 Premium on bonds payable (140000/10) 14000 Interest payable (3500000*8%) 280000 (To record accured interest)Related Questions
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