70.2K

Verified Solution

Link Copied!

On April $1,2025,$ Grouper Company sold $13,500$ of its $\backslash (11\backslash \%,15\backslash )-$year, $\backslash (\backslash$$ $1,000\backslash )$ face value bonds at $97.$ Interest payment dates are April $1$ and October $1,$ and the compary uses the straight$-$line method of bond discount amortization. On March $1,2026,$ Grouper took advantage of faworable prices of its stock to extinguish $6,300$ of the bonds by issuing $207,900$ shares of its $\backslash (\backslash$$ $10\backslash )$ par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $\backslash (\backslash$$ $31\backslash )$ per share on March $1,2026.$

Prepare the journal entries needed on the books of Grouper Compary to record the following. $($Do not round intermediate caloulations if no entry is required, select $"$No Entry' for the account tities and enter $0$ for the amounts Credit account tities are automatically indented when the amount is entered. Do not indent manually, List all debit entries before credit entries.$)$

$($a$)$ April $1,2025$: issuance of the bonds.

$[$b$]$ October $1,2025$: payment of semiannual interest.

$[$c$]$ December $31,2025$: accrual of interest experse.

$($d$)$ March $1,2026$: extinguishment of $6,300$ bonds. $($No reversing entries made.$)$

No$.$

Account Titles and Explanation

Debit

$($a$)$

$($b$)$

$($c$)$

$($d$)$

$($To record interest and discount on bonds retired$)$

Answer & Explanation Solved by verified expert

See Answer