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Chapter 12: Q14RQ (page 655)
What is the journal entry to retire bonds at maturity?
Bond payable is debited and cash credited to record the retirement of bond.
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Analyzing and journalizing bond transactions
On January 1, 2018, Electricians Credit Union (ECU) issued 8%, 20-year bondspayable with face value of $400,000. The bonds pay interest on June 30 andDecember 31. The issue price of the bonds is 104.
Journalize the following bond transactions:
a. Issuance of the bonds on January 1, 2018.
b. Payment of interest and amortization on June 30, 2018.
c. Payment of interest and amortization on December 31, 2018.
d. Retirement of the bond at maturity on December 31, 2037, assuming the last interestpayment has already been recorded.
Journalizing bond issuance and interest payments
On January 1, 2018, Roberts Unlimited issues 8%, 20-year bonds payable with a
face value of $240,000. The bonds are issued at 104 and pay interest on June 30 and
December 31.
Requirements
1. Journalize the issuance of the bonds on January 1, 2018.
2. Journalize the semiannual interest payment and amortization of bond premium on
June 30, 2018.
3. Journalize the semiannual interest payment and amortization of bond premium on
December 31, 2018.
4. Journalize the retirement of the bond at maturity, assuming the last interest payment
has already been recorded. (Give the date).
Analyzing and journalizing bond transactions
On January 1, 2018, Educators Credit Union (ECU) issued 8%, 20-year bonds payablewith face value of $1,000,000. These bonds pay interest on June 30 and December 31.The issue price of the bonds is 109.Journalize the following bond transactions:
a. Issuance of the bonds on January 1, 2018.
b. Payment of interest and amortization on June 30, 2018.
c. Payment of interest and amortization on December 31, 2018.
d. Retirement of the bond at maturity on December 31, 2037, assuming the lastinterest payment has already been recorded.
Accounting for mortgages payable
Ember Company purchased a building with a market value of \(280,000 and land with
a market value of \)55,000 on January 1, 2018. Ember Company paid \(15,000 cash and
signed a 25-year, 12% mortgage payable for the balance.
Requirements
1. Journalize the January 1, 2018, purchase.
2. Journalize the first monthly payment of \)3,370 on January 31, 2018. (Round to the
nearest dollar.)
Accounting for long-term notes payable transactions
Consider the following note payable transactions of Caleb Video Productions.
2018
Oct. 1 Purchased equipment costing \(80,000 by issuing a five-year, 8% note
payable. The note requires annual principal payments of \)16,000 plus
interest each October 1.
Dec. 31 Accrued interest on the note payable.
2019
Oct. 1 Paid the first installment on the note.
Dec. 31 Accrued interest on the note payable.
Requirements
1. Journalize the transactions for the company.
2. Considering the given transactions only, what are Caleb Video Productions鈥� total
liabilities on December 31, 2019?
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