Indira Lemana

Acc 151: Financial Accounting

BE15.1
2022
Mar. 1 Cash 294,000
Discount on Bonds Payable 6,000
Bonds Payable 300,000
(To record sales of bonds at a discount)

BE15.3
(a)
2022
Jan. 1 Cash 4,000,0000
Bonds Payable (4,000 x $1,000) 4,000,000

(b)
2022
Dec. 31 Interest Expense 320,000
Interest Payable ($4,000,000 x 8%) 320,000

(c)
2023
Jan. 1 Interest Payable 320,000
Cash 320,000

BE15.5
(a)
2022
Jan. 1 Cash 1,000,000
Bonds Payable 1,000,000
(To record sale of bonds at face value)

(b)
2022
July 1 Cash 918,000
Bonds Payable 900,000
Premium on Bonds Payable 18,000
(To record sale of bonds at a premium)
(c)
2022
Sep. 1 Cash 392,000
Discount on Bonds Payable 8,000
Bonds Payable 400,000
(To record sale of bonds at a discount)
BE15.7
2022
Dec. 31 Cash 800,000
Mortgage Payable 800,000
(To record mortgage loan)
2023
Dec. 31 Interest Expense 80,000
Mortgage Payable 50,196
Cash 130,196
(To record annual payment on mortgage)

E15.1
1. True
2. True
3. False; unsecured bonds are also known as debenture bonds
4. True
5. True
6. True
7. True

E15.3
(a)
2022
Jan. 1 Cash 400,000
Bonds Payable 400,000

(b)
2022
Dec. 31 Interest Expense 32,000
Interest Payable ($400,000 x 8%) 32,000

(c)
2023
Jan. 1 Interest Payable 32,000
Cash ($400,000 x 8%) 32,000

E15.5
(a)
2022
Jan. 1 Cash 2,000,000
Bonds Payable 2,000,000
(To record sale of bonds at face value)

2022
Jan. 1 Cash 1,960,000
Discounts on Bonds Payable 40,000
Bonds Payable 2,000,000
(To record sale of bonds at a discount)
2022
Jan. 1 Cash 2,060,000
Bonds Payable 2,000,000
Premium on Bonds Payable 60,000
(To record sale of bonds at a premium)
(b)
2022
Jan. 1 Bonds Payable 2,000,000
Cash 2,000,000
(To record redemption of bonds at maturity)

(c)
2022
Jan. 1 Bonds Payable 2,000,000
Premium on Bonds Payable 9,000
Cash 1,960,000
Gain on Bond Redemption 49,000
(To record redemption of bonds at 98)

E15.7
(a)
2022
Jan. 1 Interest Payable 112,000
Cash 112,000
(To record the payment of interest)

(b)
2022
Jan. 1 Bonds Payable 600,000
Loss on Bond Redemption 18,000
Cash 618,000
(To record redemption of bonds at 103)

(c)
2022
Dec. 31 Interest Expense 70,000
Interest Payable 70,000
(To record accrued bond interest)

P15.1
(a)
2022
May 1 Cash 600,000
Bonds Payable 600,000
(To record issuance of bonds)
(b)
2022
Dec. 31 Interest Expense 36,000
Interest Payable 36,000
(To record accrued bond interest)

(c)
Herron Crop
Balance sheet (partial)
December 31, 2022

Current Liabilities
Bonds Interest Payable $ 36,000
Long Term Liabilities
Bonds Payable 600,000

(d)
2023
May 21 Interest Expense 18,000
Interest Payable 36,000
Cash 54,000
(To record accrued bond interest)

(e)
2023
Dec. 31 Interest Expense 36,000
Interest Payable 36,000
(To record accrual of annual interest)

(f)
2024
Jan. 1 Bonds Payable 600,000
Loss on Bond Redemption 12,000
Interest Payable 36,000
Cash 648,000
(To record the payment on interest and
redemption of the bonds at 102)

P15.3
(a)
2022
Jan. 1 Interest Payable 40,000
Cash 40,000
(To record the payment of interest)
(b)
2022
Jan. 1 Bonds Payable 200,000
Loss on Bond Redemption 6,000
Cash 206,000
(To record redemption of bonds at 103)

(c)
2022
Dec. 31 Interest Expense 24,000
Interest Payable 24,000
(To record accrued bond interest)

P15.5
(a)
2022
Jan. 1 Cash 3,120,000
Bonds Payable 3,000,000
Premium on Bonds Payable 120,000
(To record sell of bonds at a premium)

(b)
Paris Electric
Bond Discount Amortization Schedule
Striaght-Line Method—Annual Interest Payments
$300,000 of 10%, 10-Year Bonds
(A) (B) (C) (D)
Unamortize (E)
Interest to Interest Expense Discount d Bond
Interest Be Paid to Be Recorded Amortization Discount Carrying Value
Periods (10% x $300,000) (A) + (C) (120,000 ÷ 10) (D) - (C) ($3,000,000 - D)
Issue date $120,000 $3,120,000
1 $300,000 $288,000 $12,000 108,000 3,108,000
2 300,000 288,000 12,000 96,000 3,096,000
3 300,000 288,000 12,000 84,000 3,084,000
4 300,000 288,000 12,000 72,000 3,072,000
(c)
2022
Dec. 31 Interest Expense 288.000
Premium on Bonds Payable 12,000
Interest Payable 300,000
(To record accrued bond interest and
amortization of bond premium)

2023
Dec. 31 Interest Expense 288.000
Premium on Bonds Payable 12,000
Interest Payable 300,000
(To record accrued bond interest and
amortization of bond premium)
(d)
Paris Electric
Balance sheet (Partial)
December 31, 2023
Current Liabilities
Bonds Interest Payable $300,000
Long Term Liabilities
Bonds Payable $3,000,000
AddL Premium on Bonds Payable 96,000 3,096,000