P10-4A Kershaw Electric Ltd. sold £6,000,000, 10%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) At December 31, 2017, the amount of amortized bond discount is £8,000. Show the statement of financial position presentation of the bond liability at December 31, 2017. (c) On January 1, 2019, when the carrying value of the bonds was £5,896,000, the com- pany redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid.

Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter13: Marketable Securities And Derivatives
Section: Chapter Questions
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P10-4A Kershaw Electric Ltd. sold £6,000,000, 10%, 15-year bonds on January 1, 2017.
The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were
sold at 98.
Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017.
(b) At December 31, 2017, the amount of amortized bond discount is £8,000. Show the
statement of financial position presentation of the bond liability at December 31,
2017.
(c) On January 1, 2019, when the carrying value of the bonds was £5,896,000, the com-
pany redeemed the bonds at 102. Record the redemption of the bonds assuming that
interest for the period has already been paid.
Transcribed Image Text:P10-4A Kershaw Electric Ltd. sold £6,000,000, 10%, 15-year bonds on January 1, 2017. The bonds were dated January 1, 2017, and paid interest on January 1. The bonds were sold at 98. Instructions (a) Prepare the journal entry to record the issuance of the bonds on January 1, 2017. (b) At December 31, 2017, the amount of amortized bond discount is £8,000. Show the statement of financial position presentation of the bond liability at December 31, 2017. (c) On January 1, 2019, when the carrying value of the bonds was £5,896,000, the com- pany redeemed the bonds at 102. Record the redemption of the bonds assuming that interest for the period has already been paid.
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