1. Lime Co. sells $600,000 of 9% bonds on April 1, 2020. The bonds pay interest on October 1 and April 1. The due date of the bonds is October 1, 2024. The bonds yield 8%. Give entries through December 31, 2021. 2. Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2020. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. structions ound to the nearest dollar.) r the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective- erest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium discount on interest dates and at year-end. (Assume that no reversing entries were made.)

1. Lime Co. sells $600,000 of 9% bonds on April 1, 2020. The bonds pay interest on October 1 and April 1. The due date of the bonds is October 1, 2024. The bonds yield 8%. Give entries through December 31, 2021. 2. Lemon Co. sells $1,000,000 of 10% bonds on August 1, 2020. The bonds pay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. structions ound to the nearest dollar.) r the two cases prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective- erest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium discount on interest dates and at year-end. (Assume that no reversing entries were made.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 7C

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