Presented below are two independent situations. 1. On January 1, 2020, Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Instructions For each of these two independent situations, prepare journal entries to record the following. a. The issuance of the bonds. b. The payment of interest on July 1. c. The accrual of interest on December 31.
Presented below are two independent situations. 1. On January 1, 2020, Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1. 2. On June 1, 2020, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1. Instructions For each of these two independent situations, prepare journal entries to record the following. a. The issuance of the bonds. b. The payment of interest on July 1. c. The accrual of interest on December 31.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...
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Question
Presented below are two independent situations.
1. On January 1, 2020, Simon Company issued $200,000 of 9%, 10-year bonds at par. Interest is payable quarterly on April 1, July 1, October 1, and January 1.
2. On June 1, 2020, Garfunkel Company issued $100,000 of 12%, 10-year bonds dated January 1 at par plus accrued interest. Interest is payable semiannually on July 1 and January 1.
Instructions
For each of these two independent situations, prepare
a. The issuance of the bonds.
b. The payment of interest on July 1.
c. The accrual of interest on December 31.
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