Homework Answers
|
No. |
Date |
Account titles and explanation |
Debit |
Credit |
|
1 |
1/1/22 |
Cash (3220000*1.01) |
3252200 |
|
|
Bonds payable |
3220000 |
|||
|
Premium on bonds payable (3220000*0.01) |
32200 |
|||
|
2 |
1/1/22 |
Cash (3220000*0.96) |
3091200 |
|
|
Discount on bonds payable (3220000*0.04) |
128800 |
|||
|
Bonds payable |
3220000 |
|
Annual interest periods |
Interest to be paid |
Interest expense to be recorded |
Premium amortization |
Unamortized premium |
Bond carrying value |
|
Issue date |
32200 |
3252200 |
|||
|
1 |
322000 |
318780 |
3220 |
28980 |
3248980 |
|
2 |
322000 |
318780 |
3220 |
25760 |
3245760 |
|
3 |
322000 |
318780 |
3220 |
22540 |
3242540 |
Premium amortization = 32200/10 = 3220
Interest expense to be recorded= Interest to be paid – premium amortization
Unamortized premium = previous unamortized premium – premium amortization
Bond carrying value = previous Bond carrying value - premium amortization
|
Annual interest periods |
Interest to be paid |
Interest expense to be recorded |
Discount amortization |
Unamortized discount |
Bond carrying value |
|
Issue date |
128800 |
3091200 |
|||
|
1 |
322000 |
334880 |
12880 |
115920 |
3104080 |
|
2 |
322000 |
334880 |
12880 |
103040 |
3116960 |
|
3 |
322000 |
334880 |
12880 |
90160 |
3129840 |
Discount amortization = 128800/10 = 12880
Interest expense to be recorded= Interest to be paid + discount amortization
Unamortized discount = previous unamortized discount – discount amortization
Bond carrying value = previous Bond carrying value + discount amortization
|
No. |
Date |
Account titles and explanation |
Debit |
Credit |
|
1 |
12/31/22 |
Bond interest expense |
318780 |
|
|
Premium on bonds payable |
3320 |
|||
|
Bond interest payable |
322000 |
|||
|
2 |
12/31/22 |
Bond interest expense |
334880 |
|
|
Discount on bonds payable |
12880 |
|||
|
Bond interest payable |
322000 |
|
CRANE COMPANY Balance sheet (partial) |
||
|
Long term liabilities |
||
|
Bonds payable |
3220000 |
|
|
Add: premium on bonds payable |
28980 |
3248980 |
|
CRANE COMPANY Balance sheet (partial) |
||
|
Long term liabilities |
||
|
Bonds payable |
3220000 |
|
|
Less: Discount on bonds payable |
115920 |
3104080 |
Add Answer to:
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------------------------------------------------------------------------------------------------------------------------------------------
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Financial statements are prepared annually.
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on January 1, 2022. The bonds were dated January 1, 2022, and pay
interest on January 1. Sheffield Corporation uses the straight-line
method to amortize bond premium or discount.
------------------------------------------------------------------------------------------------------------------------------------------
(1.) Prepare journal entries to record the issuance of
the bonds and bond interest expense for 2022, assuming that the
bonds sold at 95
(2.) Show the balance sheet presentation for the bond
issue at December 31, 2022, using the 107 selling
price....
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