Business, 09.02.2021 05:50 williamsjamon0

On March 1, 2020, Sandollar Inc. issued $30,000 of bonds at 105, paying 8% cash interest semiannually on June 30 and December 31. The bonds are scheduled to mature December 31, 2023. On September 1, 2020, $10,000 of the bonds were retired when the bonds were selling at 89. Assume the straight-line interest method is used to amortize bond discounts and premiums. Required a. Provide the entry for the bond issuance on March 1, 2020. b. Provide the entry for the interest payment on June 30, 2020. c. Provide the entry to recognize interest expense for the portion of the bond issue retired on September 1, 2020. d. Provide the entry to record the bond retirement on September 1, 2020.

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Answer from: ovowendygirl7595

Explanation:

From the given information, we can have the following breakdown.

Date Account Name Dr Cr

Mar 1 2020 Cash 31900

Bond Payable 30000

Interest Payable

(30000 × 8% × 1/6 months) 400

Premium on Bond Payable

(30000 × [105 -100]%) 1500

June 30, 2020 Interest Expense 670

Interest Payable 400

Premium on Bond payable

(1500 × 4/46 months) 130

Cash 1200

Sept 1, 2020 Interest Expense 111

Premium on bond payable 22

Cash 133

Sept 1, 2020 Bond payable 10000

Premium on Bond Payable 435

Cash 8900

Gain on Redemption of bonds 1535

Answer from: Quest

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Answer from: Quest

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On March 1, 2020, Sandollar Inc. issued $30,000 of bonds at 105, paying 8% cash interest semiannuall...

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