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Entries for bonds payable and installment note tra...

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Entries for bonds payable and installment note transaction The following transactions were completed by Wilkerson Inc., whose fiscal year is the calender year: 2012 July 1. Issued $42000,000 of 10-year, 13% callable bonds dated July 1, 2012, at a market (effective) rate of 10%, receiving cash of $49,851,213. Interest is payable semiannually on december 31 and June 30. Oct. 1. Borrowed $510,000 as a six-year, 9% installment note from Challenger Bank. The note requires annual payments of $113,689, with the first payment occurring on September 30, 2013 Dec. 31. Accrued $11,475 of interest on the installment note. The interest is payable on the date of the installment note payment 31. Paid the semiannual interest on the bonds. The bonds discount is amortized annually in a separate journal entry. 31. Recorded bond premium amortization of $392,561, which was determined using the straight-line method. 31. closed the interest expense account. 2013 June 30. Paid the semiannual interest on the bonds Sept. 30. Paid the annual payment on the note, which consisted of interest of $45,900 and principal of $67,789 Dec. 31. Accrued $9,950 of interest on the installment note. The interest is payable on the date of the next installment note payment. Dec. 31. Paid the semiannual interest on the bonds. The bond discount is amortized annually in a separate journal entry. 31. Recorded bond premium amortization of $785,122, which was determined using the straight-line method. 31. Closed the interest expense account. 2014 June 30. Recorded the redemption of the bonds, which were called at 102. The balance in the bond premium account is $6,280,969 after payment of interest and amortization of premium have been recorded. (record the redemption only.) Sept. 30. Paid the second annual payment on the note, which consisted of interest of $39,799 and principal of $73,890.,let me no if it opens,try now,did it open,ok try this one

 

Paper#6375 | Written in 18-Jul-2015

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