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Sedbober [7]
3 years ago
14

The balance sheet of Indian River Electronics Corporation as of December 31, 2017, included 11% bonds having a face amount of $9

1.2 million. The bonds had been issued in 2010 and had a remaining discount of $4.2 million at December 31, 2017. On January 1, 2018, Indian River Electronics called the bonds before their scheduled maturity at the call price of 102.
Required:
Prepare the journal entry by Indian River Electronics to record the redemption of the bonds at January 1, 2018.
Business
1 answer:
kompoz [17]3 years ago
4 0

Answer:

Bonds Payable $91,200,000

Loss on early extinguishment $6,024,000

    To Cash $93,024,000   ($91.2 million × 102%)

    To  Discount $4,200,000

(Being the redemption of the bond is recorded)

Explanation:

The journal entry is shown below:

Bonds Payable $91,200,000

Loss on early extinguishment $6,024,000

    To Cash $93,024,000   ($91.2 million × 102%)

    To  Discount $4,200,000

(Being the redemption of the bond is recorded)

For recording this journal entry we debited the bond payable as it decrease the liability moreover the cash is also decreased so it is credited and the discount is also credited and the remaining balance is debited to the loss

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patriot [66]

Answer: No, Paul has not breached a contract.

Explanation: To answer this, we must first we must define what a contract is.

A contract is an agreement between two or more people that is legally binding, and which guides or governs the actions or conducts of the parties involved.

A quality that makes a contract legally binding is that it is enforceable by law.

In the scenario given in the question above, Paul has not breached any contract because there isn't one. The promise to buy dinner has not been legally bound, therefore, it is not enforceable by law, in essence, it is not qualified to be called a contract.

8 0
3 years ago
July 1 Purchased merchandise from Boden Company for $6,000 under credit terms of 1/15, n/30, FOB shipping point, invoice dated J
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Answer:

Journal Entries are as below

Directive or Autocratic Decision Making:

Managers who embed such style assess few alternatives and consider limited information while taking any decision. They are intuitive and impulsive, do not find it important to consult with others or seek information in any form and use their cognitive process and idea while taking decisions.

BLINK COMPANY    

JOURNAL    

PERPETUAL INVETORY SYSTEM [AMOUNT IN $]    

   

DATE PARTICULARS     INVOICE DATE DR. CR.

Jul-01 PURCHASE A/C     Jul-01  6,000  

1/15,N/30  PAYABLE A/C {BODEN CO.}      6,000

Jul-02 A/C RECIEVABLE {CREEK CO.}   Jul-02  900  

                                      SALES      900

2/10,N/60    

COST OF GOODS SOLD      500  

   INVENTORY        500

Jul-03 CARRIAGE INWARDS A/C   Jul-01  125  

                                       CASH A/C      125

Jul-08 CASH A/C       1,700  

                                        SALES A/C     1,700

COST OF GOODS SOLD      1,300  

                                        INVENTORY     1,300

Jul-09 PURCHASE A/C     Jul-09  2,200  

                                        PAYABLE A/C {LEIGHT CO.}   2,200

2/15,N/60    

Jul-11 PAYABLE A/C {LEIGHT CO.}   Jul-09  200  

                                         INVENTORY     200

Jul-12 BANK A/C     Jul-02  882  

DISCOUNT ALLOWED      18  

                                          A/C RECIEVABLE {CREEK CO.}   900

Jul-16 PAYABLE A/C {BODEN CO.}   Jul-01  6,000  

                                           BANK A/C     5,940

                                           DISCOUNT RECEIVED    60

Jul-19 A/C REVIEVABLE {ART CO.}     1,200  

                                            SALES      1,200

2/15,N/60    

COST OF GOODS SOLD      800  

                                             INVENTORY     800

Jul-21 SALES RETURN A/C    Jul-19  200  

                                             A/C RECIEVABLE {ART CO.}   200

INVENTORY       134  

                                             COST OF GOOD SOLD    134

Jul-24 PAYABLE A/C {LEIGHT CO.}     2,000  

                                              BANK A/C      1,960

                                              DISCOUNT RICEIVED    40

Jul-30 BANK A/C     Jul-19  980  

DISCOUNT ALLOWED      20  

                                               A/C RECIEVABLE {ART CO.}   1,000

Jul-31 A/C RECIEVABLE {CREEK CO.}   Jul-31  7,000  

                                                SALES     7,000

2/16,N/60    

COST OF GOODS SOLD      4,800  

                                                 INVENTORY     4,800

Download xlsx
3 0
3 years ago
Chino Company reported net income of $23,000 for the current year. During the year, Inventory decreased by $7,500, Accounts Paya
ikadub [295]

Answer: A). $25,750.

Explanation:

Cash from operating activities refers to cash from the business operations of the company.

Formula is:

= Net Income + Depreciation + Decrease in inventory - Accounts payable decrease - Accounts receivable increase

= 23,000 + 10,500 + 7,500 - 8,250 - 7,000

= $25,750

7 0
3 years ago
Read 2 more answers
What is the term for the business trend that seeks to simplify and integrate all forms of communication?
Goryan [66]
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5 0
3 years ago
On January 1, Greene Inc. issued $5,000,000, 9% bonds for $4,685,000. The market rate of interest for these bonds is 10%. Intere
skad [1K]

Answer:

b.$296,500.

Explanation:

Calculation to determine what Greene should report as unamortized bond discount

First step is to calculate the discount amount

Discount Amount= ($5,000,000 × .09) - ($4,685,000 × .10)

Discount Amount= $18,500

Now let determine the unamortized bond discount

Unamortized bond discount=$315,000 - $18,500 Unamortized bond discount= $296,500

Therefore Greene should report unamortized bond discount of $296,500

5 0
2 years ago
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