Doyle Company issued a $500,000 of 10 year, 7% bonds on January 1, 2016. The bonds were issued at face value. Interest is payable in cash on December 31 of each year. Doyle immediately invested the proceeds from the bond issue in land. The land was leased for an annual $125,000 cash revenue, which was collected on December 31 of each year, beginning December 21, 2016.
Prepare the journal entries for these events, and post them to T-accounts for 2016 and 2017.
Prepare the income statement, balance sheet and statement of cash flows for 2016 and 2017.
Exercise 10-7A on page 568
On January 1, 2016, Bell Corp. issued $180,000 of 10 year, 6% bonds at their face amount. Interest is payable on December 31 of each year with the first payment due December 31, 2016.
Prepare all journal entries related to these bonds for 2016 and 2017.
Exercise 10-8A on page 568
Nivan Co. issued $500,000 of 5%, 10 year, callable bonds on January 1, 2016, at their face value. The call premium was 3 percent (bonds are callable at 103). Interest was payable annually on December 31. The bonds were called on December 31, 2020.
Prepare the journal entries to record the bond issue on January 1, 2016, and the bond redemption on December 31, 2020. Entries for accrual and payment of interest are not required.