Ramona Arroyo Co. issued the following bonds: Date of issue and sale: April 1, 20-1 Principal amount: $250,000 Sale price of bonds: 100 Denomination of bonds: $5,000 Life of bonds: 10 years Stated rate: 9%, payable semiannually on September 30 and March 31 Required: Prepare journal entries for: (a) Issuance of the bonds. (b) Interest payment on the bonds on September 30, 20-1. (c) Year-end adjustment on the bonds for 20-1. (d) Reversing entry for the beginning of 20-2. (e) Interest payments on the bonds for 20-2 (March 31 and September 30). (f) Redemption at maturity.
Ramona Arroyo Co. issued the following bonds: Date of issue and sale: April 1, 20-1 Principal amount: $250,000 Sale price of bonds: 100 Denomination of bonds: $5,000 Life of bonds: 10 years Stated rate: 9%, payable semiannually on September 30 and March 31 Required: Prepare journal entries for: (a) Issuance of the bonds. (b) Interest payment on the bonds on September 30, 20-1. (c) Year-end adjustment on the bonds for 20-1. (d) Reversing entry for the beginning of 20-2. (e) Interest payments on the bonds for 20-2 (March 31 and September 30). (f) Redemption at maturity.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter22: Corporations: Bonds
Section: Chapter Questions
Problem 8SPB: BONDS ISSUED AT FACE VALUE Ramona Arroyo Co. issued the following bonds: REQUIRED Prepare journal...
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Question
Ramona Arroyo Co. issued the following bonds:
| Date of issue and sale: | April 1, 20-1 |
| Principal amount: | $250,000 |
| Sale price of bonds: | 100 |
| Denomination of bonds: | $5,000 |
| Life of bonds: | 10 years |
| Stated rate: | 9%, payable semiannually on September 30 and March 31 |
Required:
| Prepare |
|
| (a) | Issuance of the bonds. |
| (b) | Interest payment on the bonds on September 30, 20-1. |
| (c) | Year-end adjustment on the bonds for 20-1. |
| (d) | Reversing entry for the beginning of 20-2. |
| (e) | Interest payments on the bonds for 20-2 (March 31 and September 30). |
| (f) | Redemption at maturity. |
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