On April 1, 2019, Sarkar Sailboats sold 15,000 of its 11%, 15-year, R$1,000 face value bonds to yield 12%. Interest payment dates are April 1 and October 1. On April 2, 2020, Sarkar took advantage of favorable prices of its shares to extinguish 6,000 of the bonds by issuing 200,000 of its R$10 par value ordinary shares. At this time, the accrued interest was paid in cash. The company's shares were selling for R$31 per share on April 2, 2020. Instructions Prepare the journal entries needed on the books of Sarkar to record the following. a. April 1, 2019: issuance of the bonds. b. October 1, 2019: payment of semiannual interest. c. December 31, 2019: accrual of interest expense. d. April 1, 2020: payment of semiannual interest. e. April 2, 2020: extinguishment of 6,000 bonds. (No reversing entries made.)
On April 1, 2019, Sarkar Sailboats sold 15,000 of its 11%, 15-year, R$1,000 face
Instructions
Prepare the
b. October 1, 2019: payment of semiannual interest.
c. December 31, 2019: accrual of interest expense.
d. April 1, 2020: payment of semiannual interest.
e. April 2, 2020: extinguishment of 6,000 bonds. (No reversing entries made.)
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