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  • To Record The Payment of Bond Interest

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    brownie_2529
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    The company issued $600,000 in bonds payable at face value on May 1, 2008. Interest is accrued at 9% annually and paid semi-annually. On December 31, 2008 $9,000 of interest is accrued for the period. On May 1, 2009 $27,000 of interest is paid, covering the amounts accrued for the last two periods. On November 1, 2009 another $27,000 of interest is paid. Finally, on November 1, 2009 the bonds are redeemed for $612,000, resulting in a $12,000 loss on redemption as the bonds had a 2% premium.

    Original Description:

    accounting principles

    Original Title

    P15-1A

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    © Attribution Non-Commercial (BY-NC)

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    The company issued $600,000 in bonds payable at face value on May 1, 2008. Interest is accrued at 9% annually and paid semi-annually. On December 31, 2008 $9,000 of interest is accrued for the period. On May 1, 2009 $27,000 of interest is paid, covering the amounts accrued for the last two periods. On November 1, 2009 another $27,000 of interest is paid. Finally, on November 1, 2009 the bonds are redeemed for $612,000, resulting in a $12,000 loss on redemption as the bonds had a 2% premium.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    504 views1 page

    To Record The Payment of Bond Interest

    Uploaded by

    brownie_2529
    The company issued $600,000 in bonds payable at face value on May 1, 2008. Interest is accrued at 9% annually and paid semi-annually. On December 31, 2008 $9,000 of interest is accrued for the period. On May 1, 2009 $27,000 of interest is paid, covering the amounts accrued for the last two periods. On November 1, 2009 another $27,000 of interest is paid. Finally, on November 1, 2009 the bonds are redeemed for $612,000, resulting in a $12,000 loss on redemption as the bonds had a 2% premium.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 1

    Assignment

    P15-1A

    01-MayCash $ 600,000.00
    Bonds Payable $ 600,000.00
    (To record the issuance of bonds at face value)

    B 2008
    31-DecBonds Interest Expense ($600,000 x 9 x 2/12) $ 9,000.00
    Bonds Interest Payable ($600,000 x 9 x2/12) $ 9,000.00
    (To record the accrual of interest )

    C Current Liabilities
    Bonds Interest Payable $ 9,000.00

    Long Term Liabilities


    Bonds Payable (amount due 2013) $600,000

    D 2009
    01-MayBond Interest Payable $ 9,000.00
    Bond Interest Expense ($600000 x 9 x 4/12) $ 18,000.00
    Cash (9000 +18,000) $ 27,000.00
    (To record the payment of bond interest)

    E
    01-NovBond Interest Expense ($600,000 x 9 x 6/12) $ 27,000.00
    Cash $ 27,000.00
    (To record the payment of bond interest)

    F
    01-NovBonds Payable $ 600,000.00
    Loss on Bond Redemption ($612,000 - $600,000) $ 12,000.00
    Cash ($600,000 x 1.02) $ 612,000.00

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