12/1/2017 Problem 10-3A ACCT 221-25080, Fall 2017, M/w 12:00 PM, Wells Chapter 1
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12/1/2017 Problem 10-3A ACCT 221-25080, Fall 2017, M/w 12:00 PM, Wells Chapter 10 Homework "Problem 10-3A The following section is taken from Hardesty's balance sheet at December 31, 2016. Current liabilities Interest payable Long-term liabilities 52,500 Bonds payable (10%, due January 1, 2020) 625,000 Interest is payable annually on January 1. The bonds are callable on any annual interest date. (a) Journalize the payment of the bond interest on January 1, 2017. (b) Assume that on January 1, 2017, after paying interest, Hardesty calls bonds having a face (c) Prepare the adjusting entry on December 31, 2017, to accrue the interest on the remaining value of $220,000. The call price is 107. Record the redemption of the bonds. bonds (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Date Account Titles and Explanation (a) Jan. 1 Debit Credit (b) Jan.1 (c) Dec. 31 Question Attempts: 0 of 2 used Copyright 2000-2017 by John Wiley&Sons;, Ing. or reiated companles. All rights reserved https:lledugen.wileyplus.com edugenishared/assignmentiest qprint.uniExplanation / Answer
No.
Date
Account title and explanation
Debit
Credit
a)
Jan-01
Bond interest payable
$52,500
cash
$52,500
b)
Jan-01
Bond payable
$220,000
loss on bond redemption($235,400-$220,000)
$15,400
cash(220,000*1.07=235,400)
$235,400
c)
Dec-31
Bond interest expense
$40500
cash ($625,000-$220,000)*10%*12/12
$40500
No.
Date
Account title and explanation
Debit
Credit
a)
Jan-01
Bond interest payable
$52,500
cash
$52,500
b)
Jan-01
Bond payable
$220,000
loss on bond redemption($235,400-$220,000)
$15,400
cash(220,000*1.07=235,400)
$235,400
c)
Dec-31
Bond interest expense
$40500
cash ($625,000-$220,000)*10%*12/12
$40500
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