Teton Corporation, Written assignment help

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Business Finance

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Module 1

Account lab

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8/28/2016

Print Assignment: Homework ­ Chapter 14 ::false

Brief Exercise 14­8
Teton Corporation issued $754,000 of 9% bonds on November 1, 2014, for $797,931. The
bonds were dated November 1, 2014, and mature in 8 years, with interest payable each May 1
and November 1. Teton uses the effective­interest method with an effective rate of 8%.
Prepare Teton’s December 31, 2014, adjusting entry. (Round 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.)
Date
December 31,
2014

Account Titles and
Explanation

Debit

Interest expense

Credit

10639

Premium on Bonds payable

671
11310

Interest Payable

Brief Exercise 14­11
On January 1, 2014, Henderson Corporation redeemed $680,700 of bonds at 95. At the time of
redemption, the unamortized premium was $20,421 and unamortized bond issue costs were
$6,807.
Prepare the corporation’s journal entry to record the reacquisition of the bonds. (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.)
Account Titles and Explanation

Debit

Bonds Payable

680700

Premium on Bonds Payable

20421

Cash

Credit

646665

Gain on Redemption of Bonds

47649

Un amortized bond issue costs

6807

Brief Exercise 14­15
Shlee Corporation issued a 5­year, $80,000, zero­interest­bearing note to Garcia Company on
January 1, 2014, and received cash of $80,000. In addition, Shlee agreed to sell merchandise to
Garcia at an amount less than regular selling price over the 5­year period. The market rate of
interest for similar notes is 15%.
Prepare Shlee Corporation’s January 1 journal entry. (Round 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

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8/28/2016

Print Assignment: Homework ­ Chapter 14 ::false

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