Exercise 14-13 Coronado, Inc. had outstanding $6,200,000 of 11% bonds (interest

Question

Exercise 14-13

Coronado, Inc. had outstanding $6,200,000 of 11% bonds (interest payable July 31 and January 31) due in 10 years. On July 1, it issued $9,650,000 of 10%, 15-year bonds (interest payable July 1 and January 1) at 98. A portion of the proceeds was used to call the 11% bonds (with unamortized discount of $124,000) at 102 on August 1.

Prepare the journal entries necessary to record issue of the new bonds and the refunding of the bonds. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date

Account Titles and Explanation

Debit

Credit

July 1

(To record issuance of 10% bonds)

August 1

(To record retirement of 11% bonds)

Date

Account Titles and Explanation

Debit

Credit

July 1

(To record issuance of 10% bonds)

August 1

(To record retirement of 11% bonds)

Explanation / Answer

1-Jul Cash 9457000 =9650000*0.98 Discount on bonds payable 193000        Bonds payable 9650000 1-Aug Bonds payable 6200000 Loss on redemption of bonds 248000         Discount on bonds payable 124000         Cash 6324000 =6200000*1.02

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.