The following is taken from the Colaw Company balance sheet

The following is taken from the Colaw Company balance sheet.

Interest is payable annually on January 1. The bonds are callable on any annual interest date. Colaw uses straight-line amortization for any bond premium or discount. From December 31, 2019, the bonds will be outstanding for an additional 10 years (120 months).

Instructions

Journalize the payment of bond interest on January 1, 2020.
Prepare the entry to amortize bond premium and to accrue the interest due on December 31, 2020.
Assume that on January 1, 021, after paying interest, Colaw Company calls bonds having a face value of $1,200,000. the call price is 101. Record the redemption of the bonds.
Prepare the adjusting entry at December 31, 2021, to amortize bond premium and to accrue interest on the remaining bonds.

Solution

Colaw Company
Journal Entry

Colaw Company
Adjusting Entry

Problems: Long-Term Liabilities

Problem-01: Long-Term Liabilities

On May 1, 2019, Herron Corp. issued $600,000, 9%, 5-year bonds at face value. The bonds were dated M...

Problem-02: Long-Term Liabilities

Kershaw Electric sold $6,000,000, 10%, 10-year bonds on January 1, 2019. The bonds were dated Januar...

Problem-03: Long-Term Liabilities

The following section is taken from Mareska's balance sheet at December 31, 2020. Bond interest...

Problem-04: Long-Term Liabilities

Talkington Electronics issues a $400,000, 8%, 15-year mortgage note on December 31, 2018. The procee...

Problem-05: Long-Term Liabilities

Presented below are three different lease transactions that occurred for Ruggiero Inc. in 2020. Assu...

Problem-06: Long-Term Liabilities

Paris Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2019. The bonds were dated January ...

Problem-07: Long-Term Liabilities

Saberhagen Company sold $3,500,000, 8%, 10-year bonds on January 2020. The bonds were dated January ...

Problem-08: Long-Term Liabilities

The following is taken from the Colaw Company balance sheet. Interest is payable annually on Janu...

Problem-09: Long-Term Liabilities

On January 1, 2021, Lock Corporation issued $1,800,000 face value, 5%, 10-year bonds at $1,667,518. ...

Problem-10: Long-Term Liabilities

On January 1, 2021, Jade Company issued $2,000,000 face value, 7%, 10-year bonds at $2,147,202. This...

Problem-11: Long-Term Liabilities

On January 1, 2019, Klosterman Company issued $500,000, 10%, 10-year bonds at face value. Interest i...

Problem-12: Long-Term Liabilities

On January 1, 2019, Forrester Company issued $400,000, 8%, 5-year bonds at face value. Interest is p...

Problem-13: Long-Term Liabilities

Laudie Company issued $400,000 of 9%, 10-year bonds on January 1, 2019, at face value. Interest is p...

Problem-14: Long-Term Liabilities

Swisher Company issued $2,000,000 of bonds on January 1, 2019. Instructions Prepare the journal en...

Problem-15: Long-Term Liabilities

Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2021. the bonds pay interes...

Problem-16: Long-Term Liabilities

The following section is taken from Ohlman Corp's balance sheet at December 31, 2020 Bond interes...

Problem-17: Long-Term Liabilities

Presented below are three independent situations. Longbine Corporation redeemed $130,000 face val...

Problem-18: Long-Term Liabilities

Jernigan Co. receives $300,000 when it issues a $3000,000, 10%, mortgage ote payable to finance the ...

Problem-19: Long-Term Liabilities

Dreiling Company borrowed $300,000 on January 1, 2019, by issuing a $300,000, 8% mortgage note payab...

Problem-20: Long-Term Liabilities

The adjusted trial balance for Karr Farm Corporation at the end of the current year contained the fo...

Problem-21: Long-Term Liabilities

Gilliland Airlines is considering two alternatives for the financing of a purchase of fleet of airpl...

Problem-22: Long-Term Liabilities

Hatfield Corporation reports the following amounts in its 2019 financial statements: Compute the ...

Problem-23: Long-Term Liabilities

Presented below are two independent situations Flinthills Car Rental leased a car to Jayhawk Compan...

Problem-24: Long-Term Liabilities

Adcock Company issued $600,000, 9%, 20-year bonds on January 1, 2019, at 103. interest is payable an...

Problem-25: Long-Term Liabilities

Gridley Company issued $800,000, 11%, 10-year bonds on December 31, 2020, for $730,000. Interest is ...

Problem-26: Long-Term Liabilities

Lorance Corporation issued $400,000, 7%, 20-year bonds on January 1, 2020, for $360,727. This price ...

Problem-27: Long-Term Liabilities

LRNA Company issued $380,000, 7%, 10-year bonds on January 1, 2020, for $407,968. This price resulte...

Long-Term Liabilities

Problem-08: Long-Term Liabilities

Instructions

Solution

Problems: Long-Term Liabilities

Most Reading Solutions