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176 on october 1 2007 yancy corporation purchased 20 000 of 6 bonds of jameson corpo 4296882


176. On October 1, 2007, Yancy Corporation purchased $20,000 of 6% bonds of Jameson Corporation, due in 8 1/4 years. The bonds were purchased at a price of $17,561 plus interest of $300 accrued from July 1, 2007, the date of the last semi-annual interest payments. Journalize the purchase of the bonds plus interest. 

177. Two companies are financed as follows:

 X Co.  Y Co.

Bonds payable, 9% issued at face$5,000,000$3,000,000

Common stock, $20 par3,000,0003,000,000

Income tax is estimated at 40% of income.

Determine for each company the earnings per share of common stock, assuming that the income before bond interest and income taxes is $1,500,000 each. 


(a)Prepare the journal entry to issue $200,000 bonds which sold for $195,000.

(b)Prepare the journal entry to issue $200,000 bonds which sold for $204,000.

179. Doe Co. issued $10,000,000 of 30-year, 8% bonds on May 1 of the current year, with interest payable on May 1 and November 1. The fiscal year of the company is the calendar year. Journalize the entries to record the following selected transactions for the current year:

May 1Issued the bonds for cash at their face amount.

Nov. 1Paid the interest on the bonds.

Dec. 31Recorded accrued interest for two months.

180. On the first day of the current fiscal year, $1,500,000 of 10-year, 8% bonds, with interest payable semiannually, were sold for $1,225,000. Present entries to record the following transactions for the current fiscal year:

(a)Issuance of the bonds.

(b)First semiannual interest payment.

(c)Amortization of bond discount for the year, using the straight-line method of amortization.


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