Please help! It would be greatly appreciated! Exercise 10-20 Crane Company issue

Question

Please help! It would be greatly appreciated!

Exercise 10-20 Crane Company issued $453,000, 7%, 30-year bonds on January 1, 2017, at 106. Interest is payable annually on January 1. Crane uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (a) The issuance of the bonds. (b) The accrual of interest and the premium amortization on December 31, 2017 (c) The payment of interest on January 1, 2018. (d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded Date Account Titles and Explanation Debit (a) Jan. 1, 2017 (b) Dec. 31, 2017 (c) Jan. 1, 2018

Explanation / Answer

Solution:

Journal Entries - Crane Company Date Particulars Debit Credit 1-Jan-17 Cash Dr $480,180.00         To Bond Payable $453,000.00         To Premium on Bond Payable $27,180.00 (To record issue of bond) 31-Dec-17 Interest Expense Dr $30,804.00 Premium on bond payable Dr $906.00         To Interest payable $31,710.00 (To record interest accrued and premium amortization) 1-Jan-18 Interest payable Dr $31,710.00         To Cash $31,710.00 (To record interest payment) 1-Jan-47 Bond Payable Dr $453,000.00         To Cash $453,000.00 (To record payment of bond at maturity)

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---