(Solution) 14-7 On April 1, 2017, Skysong Company Sold 28,800 Of Its 12%, 15-year, $1,000 Face Value Bonds At 97. | Snapessays.com


(Solution) 14-7 On April 1, 2017, Skysong Company sold 28,800 of its 12%, 15-year, $1,000 face value bonds at 97.


14-7On April 1, 2017, Skysong Company sold 28,800 of its 12%, 15-year, $1,000 face value bonds at 97. Interest payment dates are April 1 and October 1, and the company uses the straight-line method of bond discount amortization. On March 1, 2018, Skysong took advantage of favorable prices of its stock to extinguish 4,200 of the bonds by issuing 138,600 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The companyâs stock was selling for $30 per share on March 1, 2018.Prepare the journal entries needed on the books of Skysong Company to record the following. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)(a)April 1, 2017: issuance of the bonds.(b)October 1, 2017: payment of semiannual interest.(c)December 31, 2017: accrual of interest expense.(d)March 1, 2018: extinguishment of 4,200 bonds. (No reversing entries made.)No.DateAccount Titles and ExplanationDebitCredit(a)4/1/17(b)10/1/17(c)12/31/17(d)3/1/18(To record payment to retiring bondholders)3/1/18(To record extinguishment of the bonds)

 


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This question was answered on: May 23, 2022

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