Sarasota Company issued $2,320,000,9%, 20-year bonds on January 1, 2020, at 103. Interest is payable...
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Sarasota Company issued $2,320,000,9%, 20-year bonds on January 1, 2020, at 103. Interest is payable annually on January 1. Sarasota uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (a) (b) The issuance of the bonds. The accrual of interest and the premium amortization on December 31, 2020. The payment of interest on January 1, 2021. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (c) (d) Date Account Titles and Explanation Debit Credit 21, 2020 Cash 2389600 Premium on Bonds Payable 69600 Bonds Payable 2320000 31, 2020 Interest Expense 203000 Premium on Bonds Payable 5800 Interest Payable 208800 21, 2021 Interest Payable 208800 Cash 208800 21, 2040 Bonds Payable 2320000 Cash 2320000
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