Question

On 4/1/18 Wholeyschiff, Inc. sold 10,000 $1,9 due 4/1/28. Proceeds from the bonds were $9,565,41 dates of 4/1 and 10/1. race value, 11% bonds that are $9,565,479 and they have coupon On 4/1/20 Wholeyschiff extinguishe cash. he bonds by paying $3,900,000 of • Prepare all appropriate journal entries for the (4/1/18) through the close of the 2020 fiscal year (1210 entries for the bonds from the initial sale 020 fiscal year (12/31/20). What are the 12/31/20 balances in the related bond, ais payable accounts? in the related bond, discount, and interest al amounts related to the bonds will appear in the income sta 2020 and how will they be reported/classified?

Answer 1

Wholeyschiff
As per the given information preparation of journal entries:
Date	Particulars	Debit($)	Credit($)
4/1/2018	Cash	9565479
	Discount on bonds payable	434521
	Bonds Payable		10000000
10/1/2018	Interest expense	571726
	Cash		550000
	Discount on bonds payable		21726
4/1/2019	Interest expense	571726
	Cash		550000
	Discount on bonds payable		21726
10/1/2019	Interest expense	571726
	Cash		550000
	Discount on bonds payable		21726
4/1/2020	Interest expense	571726
	Cash		550000
	Discount on bonds payable		21726
4/1/2020	Bonds Payable	4000000
	Loss on redemption of bonds	39047
	Cash		3900000
	Discount on bonds payable		139047	Discount on bonds payable Balance as on 04/01/2020	347617
				Less: Amount to be reversed for 4000 bonds	139046.8
10/1/2020	Interest expense	343036		Balance afer part of the bond redemption	208570
	Cash		330000	No. of interest payment remains(20-4)	16
	Discount on bonds payable		13036	Per installment discount on bonds	13035.63
12/31/2020	Interest expense	171518
	Interest payable		165000
	Discount on bonds payable		6518
Balances as on 31.12.2020
Bonds Payable	6000000
Less: Discount on Bonds payable	189016
	5810984
Interest payable	165000
Amounts appear in Income statement in 2020
Interest Expense	1086280
Loss on redemption of 11% bonds	39047