Selected transactions on the books of Pfaff Corporation follow: 1. May 1, 2017 Bonds payable...
60.1K
Verified Solution
Link Copied!
Question
Accounting
Selected transactions on the books of Pfaff Corporation follow:
1. May 1, 2017 Bonds payable with a par value of $700,000, which are dated January 1, 2011, are sold at 105 plus accrued interest. They are coupon bonds, bear interest at 12% (payable annually at January 1), and mature on January 1, 2021. (Use an interest expense account for accrued interest.)
2. Dec. 31 Adjusting entries are made to record the accrued interest on the bonds and the amortization of the proper amount of premium. (Use straight-line amortization.)
3. Jan. 1, 2018 Interest on the bonds is paid.
4. April 1 Par value bonds of $420,000 are purchased at 103 plus accrued interest and are retired. (Bond premium is to be amortized only at the end of each year.)
5. Dec. 31 Adjusting entries are made to record the accrued interest on the bonds, and the proper amount of premium amortized. Instructions
Answer the following:
(a) Assume that Pfaff follows private enterprise GAAP (ASPE). Prepare the journal entries for the transaction above.
(b) How would your answers above change if Pfaff were to follow IFRS?
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!
