On May 1, 2014, Herron Corp. issued $507,600, 10%,
5-year bonds at face value. The bonds were dated May 1, 2014, and pay
interest semiannually on May 1 and November 1. Financial statements are
prepared annually on December 31.
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Your answer is correct.
Prepare
the journal entry to record the issuance of the bonds.(Credit
account titles are automatically indented when amount is entered. Do not
indent manually.)
Date
Account Titles
and Explanation
Debit
Credit
May 1, 2014
Cash
507600
Bonds Payable
507600
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Prepare
the adjusting entry to record the accrual of interest on December 31,
2014.(Credit account titles are automatically indented when amount
is entered. Do not indent manually.)
Date
Account Titles
and Explanation
Debit
Credit
Dec. 31, 2014
Interest Expense
25380
Interest Payable
25380
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Show
the balance sheet presentation on December 31, 2014.(For
Bonds Payable, Notes Payable and Mortgage payable enter the account name
only and do not provide any additional descriptive information e.g. due
2017.)
Herron Corp.
Balance Sheet
December 31, 2014
res_EAT_1358400021823_0_020787848308588264_027
Interest Payable
$
res_EAT_1358400021823_0_020787848308588264_052
Bonds Payable
$507600
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Prepare
the journal entry to record payment of interest on May 1, 2015, assuming
no accrual of interest from January 1, 2015, to May 1, 2015.(Credit
account titles are automatically indented when amount is entered. Do not
indent manually.)
Date
Account Titles
and Explanation
Debit
Credit
May 1, 2015
Interest Payable
Interest Expense
Cash
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Prepare
the journal entry to record payment of interest on November 1, 2015.(Credit
account titles are automatically indented when amount is entered. Do not
indent manually.)
Date
Account Titles
and Explanation
Debit
Credit
Nov. 1, 2015
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Assume
that on November 1, 2015, Herron calls the bonds at 103. Record the
redemption of the bonds.(Credit account titles
are automatically indented when amount is entered. Do not indent
manually.)
Date
Account Titles
and Explanation
Debit
Credit
Nov. 1, 2015
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Talkington Electronics issues a $392,100, 10%, 10-year
mortgage note on December 31, 2013. The proceeds from the note are to be
used in financing a new research laboratory. The terms of the note
provide for semiannual installment payments, exclusive of real estate
taxes and insurance, of $31,463. Payments are due June 30 and December
31.
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Prepare
an installment payments schedule for the first 2 years.(Round
answers to 0 decimal places, e.g. 15,250.)
Semiannual
Interest Period
Cash
Payment
Interest
Expense
Reduction
of Principal
Principal
Balance
Issue Date
$392100
1
$
$
$
2
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