Question Details

The bonds pay semiannual interest and the interest payment due on June 30



Ex. 1
Presented below are three independent situations:
(a)	Howell Corporation purchased $350,000 of its bonds on June 30, 2011, at 102 and immediately retired them. The carrying value of the bonds on the retirement date was $339,500. The bonds pay semiannual interest and the interest payment due on June 30, 2011, has been made and recorded.
(b)	Justice, Inc. purchased $400,000 of its bonds at 97 on June 30, 2011, and immediately retired them. The carrying value of the bonds on the retirement date was $393,000. The bonds pay semiannual interest and the interest payment due on June 30, 2011, has been made and recorded.
	
Instructions
For each of the independent situations, prepare the journal entry to record the retirement or conversion of the bonds.

Ex. 2
Riley Company issued a $2,500,000, 10%, 10-year mortgage note payable to finance the construction of a building at December 31, 2011. The terms provide for semiannual installment payments of $200,608.

Instructions
Prepare the entry to record:
(a)	the mortgage loan on December 31, 2011.
(b)	the first installment payment.




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