Valix Finacc vol 1 Problem 13-7

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 13-7

1. Sinking fund – trustee                                                                     1,000,000

            Cash                                                                                                              1,000,000

2. No entry

3. No entry

4. No entry

5. No entry

6. Sinking fund – trustee                                                                       140,000

    Sinking fund expense                                                                         30,000

            Sinking fund income (60,000 + 10,000)                                                               70,000

            Gain on sale of securities                                                                                100,000

                                                                                                         

7. Bonds payable                                                                               1,000,000

    Interest expense                                                                               100,000

            Sinking fund – trustee                                                                                    1,100,000

  

8. Cash                                                                                                  40,000

            Sinking fund – trustee                                                                                        40,000