Chapter 1 Problem 13-4
2008
Jan. 1 Sinking fund cash 400,000
Cash 400,000
April 1 Sinking fund securities 384,000
Sinking fund cash 384,000
Oct. 1 Sinking fund cash 24,000
Sinking fund income (400,000 x 12% x 6/12) 24,000
Dec. 31 Sinking fund cash 400,000
Cash 400,000
31 Accrued interest receivable 12,000
Sinking fund income (400,000 x 12% x 3/12) 12,000
Sinking fund securities 3,000
Sinking fund income 3,000
Amortization of discount on sinking fund securities
for 9 months. (16,000/4 years = 4,000 x 9/12 = 3,000)
31 Retained earnings 439,000
Retained earnings appropriated for sinking fund 439,000
Sinking fund cash 440,000
Sinking fund securities 387,000
Accrued interest receivable 12,000
Total 839,000
Less: Appropriated retained earnings balance 400,000
Additional appropriation 439,000
172
2009
Jan. 1 Sinking fund income 12,000
Accrued interest receivable 12,000
April 1 Sinking fund cash 24,000
Sinking fund income 24,000
1 Sinking fund expenses 12,000
Sinking fund cash 12,000
Oct. 1 Sinking fund cash 24,000
Sinking fund income 24,000
1 Sinking fund securities (4,000 x 9/12) 3,000
Sinking fund income 3,000
1 Sinking fund cash (400,000 x 106%) 424,000
Sinking fund securities 390,000
Gain on sale of securities 34,000
Dec. 31 Sinking fund cash 400,000
Cash 400,000
31 Retained earnings 461,000
Retained earnings appropriated for sinking fund 461,000
Sinking fund cash 1,300,000
Less: Appropriated retained earnings balance 839,000
Additional appropriation 461,000
2010
July 1 Bonds payable 1,000,000
Interest expense 100,000
Sinking fund cash 1,100,000
1 Cash 200,000
Sinking fund cash 200,000
1 Retained earnings appropriated for sinking fund 1,300,000
Retained earnings 1,300,000
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