Question: Problem 14-7 Z Your answer is partially correct. Try again. On April 1 2017, Monty Company sold 2...Question: Problem 14-7 Z Your answer is partially correct. Try again. On April 1 2017, Monty Company sold 2...

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Question: Problem 14-7 Z Your answer is partially correct. Try again. On April 1 2017, Monty Company sold 2…
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3/1/18 Interest Expense and Discount on Bonds Payable. Please
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Show transcribed image text Problem 14-7 Z Your answer is partially correct. Try again. On April 1 2017, Monty Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 96. 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, Monty took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2018. Prepare the journal entries needed on the books of Monty 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 o 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 7,500 bonds. (No reversing entries made.) Account Titles and Explanation Credit cash 24192000 1008000 Discount on Bonds Payable Bonds Payable 25200000 (b) 10/1/1 Interest Expense 1293600 Discount on Bonds Paya 33600 T Cash 1260000 c) 12/31/1 Interest Expense 646800 Discount on Bonds Paya 16800 630000 Interest Payable (d) 3/1/18 Interest Expense 132500

Problem 14-7 Z Your answer is partially correct. Try again. On April 1 2017, Monty Company sold 25,200 of its 10%, 15-year, $1,000 face value bonds at 96. 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, Monty took advantage of favorable prices of its stock to extinguish 7,500 of the bonds by issuing 247,500 shares of its $10 par value common stock. At this time, the accrued interest was paid in cash. The company's stock was selling for $32 per share on March 1, 2018. Prepare the journal entries needed on the books of Monty 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 o 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 7,500 bonds. (No reversing entries made.) Account Titles and Explanation Credit cash 24192000 1008000 Discount on Bonds Payable Bonds Payable 25200000 (b) 10/1/1 Interest Expense 1293600 Discount on Bonds Paya 33600 T Cash 1260000 c) 12/31/1 Interest Expense 646800 Discount on Bonds Paya 16800 630000 Interest Payable (d) 3/1/18 Interest Expense 132500

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