Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1,2019, smalls, inc. issued $60,000 of

On January 1,2019, Smalls, Inc. issued $60,000 of its 12-year 10% bonds for $52,584. a....

90.2K

Verified Solution

Question

Accounting

On January 1,2019, Smalls, Inc. issued $60,000 of its 12-year 10% bonds for $52,584. a. Prepare the entries to record the issuance of the bonds on January 1.
General Journal Instructions
GENERAL JOURNALb. Prepare the journal entry to record interest expense in 2020 using the effective interest method on December 31.
General Journal Instructionsc. Prepare the journal entry to record interest expense in 2020 using the straight-line method on December 31.
General Journal Instructions
PAGE 1
GENERAL JOURNAL
\table[[,DATE,,POST. REF.,DEBIT,CREDIT],[1,Dec. 31,Interest Expense,,6,618.00,],[2,,Discount on Bonds Payable,,,],[3,,Cash,,6,000.00,],[4,Dec. 31,Deferred Debt Issuance Costs,,,],[5,,,,,],[,,,,,]]Interest is payable annually and the effective yield was 12%. Costs connected with the issue totaled $3,200.
Required:
a. Prepare the entry to record the issuance of the bonds.
b. Prepare the journal entry to record interest expense in 2020 using the effective interest method.
c. Prepare the journal entry to record interest expense in 2020 using the straight-line method.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

An urn contains 7 black balls, 4 red balls, 3 white balls and 1 blue ball,...

Statistics
Q

Describe (in detail) similarities and differences in pond structure between Green Library and OE Ponds. Choose...

Biology
Q

Which statement is incorrect a The late phase of asthma involves T lymphocytes b Leukotrienes...

Biology
Q

A crown glass prism of angle 10 and dispersive power 0 01575 is to be...

Physics
Q

A coil of n turns and resistance R connected in series with a resistance R...

Physics
Q

Which of the following statement is true regarding forced oscillation ? If the driving frequency...

Physics
Q

Pearl Harbor

Basic Math
Q

Classify the following: The number letters in a city and the population of the city.Correlation...

Basic Math
Q

Can someone help me with these problems? SmokeCity, Inc., manufactures...

Accounting
Q

Net income for the year for Larkspur, Inc. was $748,710, but the statement of cash...

Accounting
Q

Inventory information for Part 311 of Crane Corp. discloses the following information for the month...

Accounting
Q

10 Need this done asap. Please help. Thanks. Current position analysis The following...

Accounting