Please solve for this: On January 1, 2016 Focus Corporation issued $500,000, 6%,
ID: 2445480 • Letter: P
Question
Please solve for this:
On January 1, 2016 Focus Corporation issued $500,000, 6%, 5-year bonds at face value. Interest is payable annually on January 1. Instructions Prepare journal entries to record the (a) Issuance of the bonds. (b) Accrual of interest on December 31. (c) Payment of interest on January 1, 2017.
2. The following section is taken from Greene Corp’s balance sheet at December 31, 2016. Current liabilities Interest Payable ......................................................... $ 180,000 Long-term liabilities Bonds Payable, 9%, due January 1, 2021 ................. 2,000,000 Interest is payable annually on January 1. The bonds are callable on any interest date. Instructions (a) Journalize the payment of the bond interest on January 1, 2017. (b) Assume that on January 1, 2017, after paying interest, Greene calls bonds having a face value of $800,000. The call price is 106. Record the redemption of the bonds. (c) Prepare the entry to record the accrual of interest on December 31, 2017, assuming no previous accrual of interest on the remaining bonds.
3. Kirk Company issued a $3,500,000, 10%, 10-year mortgage note payable to finance the construction of a building at December 31, 2017. The terms provide for annual installment payments of $569,609. Instructions Prepare the entry to record: (a) the mortgage loan on December 31, 2017. (b) the first installment payment.
Explanation / Answer
2)
3) Journal Entry ot record the Mortgage loan on dec 31 2017
DAte Particulars Amount($) Amount($) JAn 1 2015 CAsh A/c 500000 TO Bonds PAyable 500000 dec 31 2105 Bond Interest Expense A/c (500000x6%) 30000 To Interest Payable A/c 30000 (Being Bond Interest Accrued) JAn1 2016 Interest Expense A/c 30000 To CAsh 30000