Journal Entries

Question 1

JE for Sale of Bonds with Issue Costs

Answer 1

Dr. Cash
Dr. Bond Issue Costs (entire amount)
Cr. Bonds Payable
Cr. Bond Premium

Question 2

JE for Bond to Stocks (Book Value Method)

Answer 2

*NO G/L recognized

Dr. Bond Payable
Dr. Bond Premium
Cr. Common Stock (Par)
Cr. APIC (plug)

Question 3

JE for Bond Issuance on Interest Date

Bond Sold at Premium

Answer 3

Dr. Cash
Cr. Premium
Cr. Bond Payable

Question 4

JE for Bond Issuance on Interest Date

Bond Sold at Discount

Answer 4

Dr. Cash
Dr. Discount
Cr. Bond Payable

Question 5

JE for Bond Issuance between Interest Date

Answer 5

Dr. Cash
Dr. Cash - Interest*
  Cr. Premium
  Cr. Bond Payable
  Cr. Interest Payable*

*Face value x Stated Rate x Interest Accrued since last date

Question 6

JE for Convertible Bonds - Book Value Method

Answer 6

*NO G/L

Dr. Bonds Payable - Face Amt
Dr. Premium (or Cr. Discount) - Balance
Cr. Common Stock - Par
Cr. APIC (plug)

Question 7

JE for Convertible Bonds - Market Value Method

Answer 7

*YES G/L

Dr. Bonds Payable - Face Amt
Dr. Premium (or Cr. Discount) - Balance
Dr. Gain (or Cr. Loss)
  Cr. Common Stock - Par
  Cr. APIC (calculated - NOT plug)

Question 8

JE to Record Purchase Order

Answer 8

Dr. Encumbrances

Cr. Budgetary Fund Balance

Question 9

JE to Record Progress Billings

Answer 9

Dr. Budgetary Fund Balance
Dr. Expenditures
Cr. Encumbrances
Cr. Contracts Payable

Question 10

JE for Opening Budgetary Entry

Answer 10

Dr. Estimated Revenues Control
Dr. or Cr. Budgetary Fund Balance (plug)
Cr. Appropriations Control

Question 11

JE for Closing Budgetary Entry

Answer 11

Dr. Appropriations Control
Dr. or Cr. Budgetary Fund Balance (plug)
Cr. Estimated Revenues Control

Question 12

JE to Record Capital Lease Payments - Lessee

Answer 12

Dr. Interest Expense

Cr. Cash (or Lease Payable)

Question 13

JE to Record Capital Lease

Answer 13

Dr. Lease Receivable
Cr. Asset
Cr. Unearned Revenue

Question 14

JE to Record Capital Lease Payments - Lessor

Answer 14

Dr. Cash
Dr. Unearned Revenue
Cr. Lease Receivable
Cr. Interest Income

Question 15

JE to Record Operating Lease Payments - Lessee

Answer 15

Dr. Rent Expense

Cr. Cash (or Rent Payable)

Question 16

JE to Record Operating Lease Payments - Lessor

Answer 16

Dr. Cash (or Rent Receivable)

Cr. Rent Revenue

Question 17

JE for Reissue of Treasury Stock (T/S) - Cost Method

[Reissue Price > Buyback Price]

Answer 17

Dr. Cash
Cr. T/S (# Shares * original repurchase price)
Cr. APIC (plug)

Question 18

JE for Reissue of Treasury Stock (T/S) - Cost Method

[Reissue Price

Answer 18

Dr. Cash
Dr. APIC (or Retained Earnings if APIC exhausted)
Cr. T/S (# Shares * original repurchase price)

Question 19

JE for Stock Options Granted

Answer 19

Dr. Deferred Compensation (FV of option x # shares)

Cr. APIC - Stock Options

Question 20

JE for Stock Options Exercised

Answer 20

Dr. Compensation Expense
Dr. Cash (option price x # shares)
Dr. APIC - Stock Options
  Cr. Deferred Compensation
  Cr. Common Stock (par x # shares)
  Cr. APIC (plug)