90.2K

Verified Solution

Link Copied!

Campbel, inc. produces and solls outdoot equipment. On July 1, 20Y1, Campbell issued $40,000,000 of 10 yoar, 10% bonds at a market (ettoctive) interest rate of 9%, receiving cash of $42,601,480. Interest on the bonds is payable semiannually on December 31 and June 30 . The fiscal year of the company is the calondar ynar. Required: 1. Joumalize the entry to tecord the amount of cash proceeds from the issuance of the bonds. 2. Joumatze the entries fo record the following a. The first semiasnual incerest payment on December 3f,20Y, and the amortiation of the bond premium, ising the interest method. b. The interest payment on June 30,20Y2, and the amorfization of the bond premum, using the interest method 3 Detemine the fotal interest expense for 20y1. The following transactions were completed by Winklevoss Inc., whose fiscal year is the calendar year: 20Y1 July 1 Issued $74,000,000 of 20-year, 11\% callable bonds dated July 1, 20Y1, at a market (effective) rate of 13%, receiving cash of $63,532,267. Interest is payable semiannually on December 31 and June 30 . Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 20Y2 June 30 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. Dec. 31 Paid the semiannual interest on the bonds. The bond discount amortization of $261,693 is combined with the semiannual interest payment. 20Y3 June 30 Recorded the redemption of the bonds, which were called at 98 . The balance in the bond discount account is $9,420,961 after payment of interest and amortization of discount have been recorded. (Record the redemption only.) Required: 1. Joumalize the entries to record the transactions. 2. Indicate the amount of the interest expense in (a) 20Y1 and (b) 20Y2. 1. Joumalize the ontry to record the amount of cash proceeds from the issuance of the bends: 2a. Joumaize the entry to record the frat semiannual interest payment an Decomber 31, 20y1, and the amartization of the bond premium, using the interest method. Geoncal Joumal instructions 2b. Journalize the enty to record the interest payment on June 30, 20Y2, and the amortization of the bond premium, using the interest method. 3. Determine the total interest expense for 20Y1

Answer & Explanation Solved by verified expert

See Answer