Chapter 1 Problem 13-6
1. Sinking fund cash 2,000,000
Cash 2,000,000
2. Sinking fund securities 450,000
Sinking fund cash 450,000
3. Sinking fund securities 400,000
Sinking fund cash 400,000
4. Sinking fund cash 60,000
Sinking fund income (500,000 x 12%) 60,000
Sinking fund securities 10,000
Sinking fund income 10,000
Amortization of bond discount (50,000/5 years = 10,000 per year)
5. Sinking fund expenses 20,000
Sinking fund cash 20,000
6. Sinking fund securities 400,000
Sinking fund income 10,000
Sinking fund cash 410,000
7. Sinking fund cash 50,000
Sinking fund income (500,000 x 10%) 50,000
8. Sinking fund cash 20,000
Sinking fund income 20,000
9. Sinking fund cash 450,000
Sinking fund securities 400,000
Gain on sale of securities 50,000
10. Retained earnings 2,160,000
Retained earnings appropriated for sinking fund 2,160,000
Composition of fund:
Sinking fund cash 1,300,000
Sinking fund securities 860,000
2,160,000
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