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Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

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BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
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Annapolis Corporation paid $270,000 to retire bonds with a face value of $300,000 and a book value of $290,000. Prepare the spreadsheet entry (in journal entry format) to record the retirement of these bonds for Annapolis’s statement of cash flows.

To determine

Report the spreadsheet entry in journal entry format for retirement of bonds.

Explanation

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period. Statement of cash flows includes the changes in cash balance due to operating, investing, and financing activities.

Worksheet: A worksheet is a spreadsheet used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.

Bonds: Bonds are long-term promissory notes that are represented by a company while borrowing money from investors to raise fund for financing the operations.

Report the spreadsheet entry in journal entry format for retirement of bonds:

DateAccounts and ExplanationDebit ($)

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