Exercise 10-20 Adcock Company issued $220,000, 6%, 20-year bonds on January 1, 2
ID: 2527568 • Letter: E
Question
Exercise 10-20
Adcock Company issued $220,000, 6%, 20-year bonds on January 1, 2015, at 105. Interest is payable semiannually on July 1 and January 1. Adcock uses straight-line amortization for bond premium or discount.
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2015
SHOW LIST OF ACCOUNTS
Date
Account Titles and Explanation
Debit
Credit
July 1, 2015
SHOW LIST OF ACCOUNTS
Date
Account Titles and Explanation
Debit
Credit
Dec. 31, 2015
SHOW LIST OF ACCOUNTS
Date
Account Titles and Explanation
Debit
Credit
Jan. 1, 2035
Exercise 10-20
Adcock Company issued $220,000, 6%, 20-year bonds on January 1, 2015, at 105. Interest is payable semiannually on July 1 and January 1. Adcock uses straight-line amortization for bond premium or discount.
Explanation / Answer
Date Account titles and Explanation Debit Credit 1/1/2015 Cash (220000*1.05) 231000 premium on bonds payable 11000 Bonds payable 220,000 7/1/2015 interest expense 6385 Premium on bonds (11000/40) 275 Cash (220,000*3%) 6600 12/31/2015 interest expense 6,385 Premium on bonds 275 interest payable 6,600 1/1/2035 Bonds payable 220,000 cash 220,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.