Codee
Mar 3, 2009, 04:28 PM
Can you combine an entry for paying semiannual interest and purchasing face value bonds?
On March 1, Titus Co issued $800,000 face value second mortgage, 8% bonds for $872,160 including accrued interest, Interest is paid semiannually on Dec 1 and June 1 with the bonds maturing 10 years from this past Dec 1. The bonds are callable at 102.
Entry March 1
Cash $872,160
Bonds Payable $800,000
Premium on Bonds Pay $56,160
Bond Int Expense $16,000
Paid Semiannual interest on Titus Co bonds (straightline amortization of disc or premium)
Entry June 1
Bond Int Expense $32,000
Cash $32,000
******MY QUESTION*******
Paid semiannual interest on Titus Co bonds and purchased $400,000 face value bonds at call price
Entry Dec 1
Bond Interest Expense $32,000
Treasury Stock $408,000
Cash $440,000
On March 1, Titus Co issued $800,000 face value second mortgage, 8% bonds for $872,160 including accrued interest, Interest is paid semiannually on Dec 1 and June 1 with the bonds maturing 10 years from this past Dec 1. The bonds are callable at 102.
Entry March 1
Cash $872,160
Bonds Payable $800,000
Premium on Bonds Pay $56,160
Bond Int Expense $16,000
Paid Semiannual interest on Titus Co bonds (straightline amortization of disc or premium)
Entry June 1
Bond Int Expense $32,000
Cash $32,000
******MY QUESTION*******
Paid semiannual interest on Titus Co bonds and purchased $400,000 face value bonds at call price
Entry Dec 1
Bond Interest Expense $32,000
Treasury Stock $408,000
Cash $440,000