Question

Please record the correct journal entries for these four problems. State whether it is a debit or credit. Thank you! (Ignore responses shown in photos, they are incorrect)

4 Om Jaly I,Corel Fashion Inc sold is old office fumiture for $6.000. The oniginal cost was $12.0d t Prepure the journal entry to record the sale Deht Dste Accounts

Answer 1

1)
	Date	Accounts	Debit	Credit
	Jan 1, 2016	Cash	$ 6,69,340
		Discount on Bonds Payable	$     30,660
		Bonds Payable		$       7,00,000
		(To record issuance of Bonds Payable at discount)
	Working:
		Issue price of bonds	=	Face Value * % of issuance
			=	$       7,00,000	*	95.62%
			=	$       6,69,340
		Discount on issuance of bonds payable	=	Face Value - Issued Price
			=	$       7,00,000	-	$ 6,69,340
			=	$           30,660
2)
	Date	Accounts	Debit	Credit
	Jan 1, 2015	Cash	$ 7,00,000
		Bonds Payable		$       7,00,000
		(To record issuance of Bonds Payable at Par)
3)
	Date	Accounts	Debit	Credit
	July 1, 2015	Interest Expense	$     17,500
		Cash		$           17,500
		(To record interest payment)
	Working;
	Semi annual interest expense		=	Face Value * Semi annual coupon interest rate
			=	$       7,00,000	*	5%	*	6/12
			=	$           17,500
4)
	Date	Accounts	Debit	Credit
	July 1	Cash	$       6,000
		Accumulated depreciation	$       8,000
		Furniture		$           12,000
		Profit on sale of furniture		$             2,000
		(To record sale of old office furniture)