Instructions Emil Corp. produces and sells wind-energy-driven engines. To financ

Question

Instructions Emil Corp. produces and sells wind-energy-driven engines. To finance its operations, Emil Corp. issued $33,100,000 of 20-year, 4% callable bonds on May 1 , 20Y1 , at their face amount, with interest payable on May 1 and November 1 . The fiscal year of the company is the calendar year Journalize the entries to record the following selected transactions. Be sure to include the year in the date for the entries recording the issue and calling of the bonds. Refer to the Chart of Accounts for exact wording of account titles. 20Y1 May Nov. 20Y5 Nov. 1 Issued the bonds for cash at their face amount. 1 Paid the interest on the bonds. Called the bond issue at 98, the rate provided in the bond indenture. (Omit entry for payment of interest.)

Explanation / Answer

Solution:

Journal Accounting Equation Date Description Post. Ref. Debit Credit Assets Liabilities Equity 1-May-20Y1 Cash Dr $33,100,000.00 $33,100,000.00         To Bond Payable $33,100,000.00 $33,100,000.00 (To record issue of bond) 1-Nov-20Y1 Interest expense Dr $662,000.00 -$662,000.00         To Cash $662,000.00 -$662,000.00 (To record payment of interest) 1-Nov-20Y5 Bond Payable Dr $33,100,000.00 -$33,100,000.00         To Cash $32,438,000.00 -$32,438,000.00         To Gain on retirement of bond $662,000.00 $662,000.00 (To record bond retirement)

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---