Rushton Corp., a wholesaler of music equipment, issued $11,000,000 of 20-year, 9% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions: 20Y1 Mar. 1 Issued the bonds for cash at their face amount. Sept. 1 Paid the interest on the bonds. 20Y5 Sept. 1 Called the bond issue at 101, the rate provided in the bond indenture. (Omit entry for payment of interest.) Question Content Area Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank. 20Y1 Mar. 1 Cash Cash Bonds Payable Bonds Payable Feedback Area Feedback Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Question Content Area Paid the interest on the bonds. If an amount box does not require an entry, leave it blank. 20Y1 Sept. 1 Interest Expense Interest Expense Cash Cash Feedback Area Feedback Interest expense is determined by the formula: Principal x Interest Rate x Time. Question Content Area Called the bond issue at 101, the rate provided in the bond indenture. (Omit entry for payment of interest.) If an amount box does not require an entry, leave it blank. 20Y5 Sept. 1 Bonds Payable Bonds Payable Loss on Redemption of Bonds Loss on Redemption of Bonds Cash Cash Feedback Area
Rushton Corp., a wholesaler of music equipment, issued $11,000,000 of 20-year, 9% callable bonds on March 1, 20Y1, at their face amount, with interest payable on March 1 and September 1. The fiscal year of the company is the calendar year.
20Y1 | |
Mar. 1 | Issued the bonds for cash at their face amount. |
Sept. 1 | Paid the interest on the bonds. |
20Y5 | |
Sept. 1 | Called the bond issue at 101, the rate provided in the bond indenture. (Omit entry for payment of interest.) |
Question Content Area
Issued the bonds for cash at their face amount. If an amount box does not require an entry, leave it blank.
20Y1 Mar. 1 |
|
Cash | Cash |
|
Bonds Payable | Bonds Payable |
Feedback Area
Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.
Question Content Area
Paid the interest on the bonds. If an amount box does not require an entry, leave it blank.
20Y1 Sept. 1 |
|
Interest Expense | Interest Expense |
|
Cash | Cash |
Feedback Area
Interest expense is determined by the formula: Principal x Interest Rate x Time.
Question Content Area
Called the bond issue at 101, the rate provided in the bond indenture. (Omit entry for payment of interest.) If an amount box does not require an entry, leave it blank.
20Y5 Sept. 1 |
|
Bonds Payable | Bonds Payable |
|
Loss on Redemption of Bonds | Loss on Redemption of Bonds | |
|
Cash | Cash |
Feedback Area
The gain or loss is the balancing amount needed to complete the entry and is the difference between the carrying amount of the bonds and the redemption price.
A corporation usually redeems its bonds at a price different from that of the carrying amount of the bonds.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images