1 answer

Dallas Clothing Company issued $400,000 of 6% serial bonds on July 1, 2019, at face value....

Question:

Dallas Clothing Company issued $400,000 of 6% serial bonds on July 1, 2019, at face value. The bonds are dated July 1, 2019;
A. Prepare the journal entry to record the issuance of the bonds on July 1, 2019. B. Prepare the adjusting entry needed on Se
Dallas Clothing Company issued $400,000 of 6% serial bonds on July 1, 2019, at face value. The bonds are dated July 1, 2019; they call for semiannual interest payments on July 1 and January 1; and they mature at the rate of $100,000 per year, with the first maturity date falling on July 1, 2020. The company's accounting period ends on September 30.
A. Prepare the journal entry to record the issuance of the bonds on July 1, 2019. B. Prepare the adjusting entry needed on September 30, 2019. C. Prepare the journal entry to record the interest payment on January 1, 2020. D. Prepare the journal entry to record the interest payment of July 1, 2020 E. Prepare the journal entry to record the maturing of $100,000 of bonds on July 1, 2020 F. Prepare the adjusting entry needed on September 30, 2020. G. Show how the bonds would be presented in the company's balance sheet for September 30, 2020.

Answers

Debit ($) Credit($)
A Jul-19 Cash 400000
Bonds payable 400000
B Sep-19 Bond interest expene a/c (400000 × 6%× 3/12) 6000
Interest payable 6000
C Jan-20 Bond interest exp account 6000
Interest payable 6000
cash 12000
D Jul-20 Bond interest expense account 12000
Cash 12000
E Jul-20 Bonds payable account 100000
cash 100000
(Maturing of $100000 bonds)
F Sep-20 Bond interest expense account ( $300000 × 6% × 3/12) 4500
Interest payable 4500
.

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