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vekshin1
3 years ago
12

On September 30, 2012, Wildhorse Company issued 9% bonds with a par value of $580,000 due in 20 years. They were issued at 97 an

d were callable at 103 at any date after September 30, 2017. Because Wildhorse Company was able to obtain financing at lower rates, it decided to call the entire issue on September 30, 2018, and to issue new bonds. New 7% bonds were sold in the amount of $700,000 at 104; they mature in 20 years. Wildhorse Company uses straight-line amortization. Interest payment dates are March 31 and September 30.
Required:
Prepare journal entries to record the redemption of the old issue and the sale of the new issue on September 30, 2018.
Business
1 answer:
xxMikexx [17]3 years ago
8 0

Answer:

Wildhorse Company

Journal Entries:

September 30, 2018:

Debit 9% Bonds Payable $580,000

Debit Bond Redemption Expenses $17,400

Credit Cash $597,400

To record the redemption of the 9% Bonds Payable at 103.

September 30, 2018:

Debit Cash $728,000

Credit 7% Bonds Payable $700,000

Credit Bonds Premium $28,000

To record the sale of 7% Bonds Payable at 104.

Explanation:

a) Dat and Calculations:

9% bonds payable at par value = $580,000

Issued at a discount of $17,400 ($580,000 * 97/100) - $580,000

Redeemed at a premium of $17,400 ($580,000 * 103/100) - $580,000

7% bonds payable at par value = $700,000

Issued at a premium of $28,000 ($700,000 * 104/100) - $700,000

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Each country must answer three economic questions.<br>Define and describe each economic question
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Answer:

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2 years ago
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Answer:

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