During two consecutive years Horton Medical Clinic

completed the following

During two consecutive years, Horton Medical Clinic completed the following transactions
relating to its $ 6,750,000 issue of 30-year, 7 percent bonds, dated April 1 of the first year.
Interest is payable April 1 and October 1. The corporation’s fiscal year extends from January 1
through December 31. Year 1 Apr. 1 Sold the bond issue at 98. Oct. 1 Paid semiannual interest
on the bonds. Dec. 31 Deposited $ 59,625 in a bond sinking fund. 31 Made an adjusting entry to
record amortization of bond discount. 31 Made an adjusting entry to record accrued interest
payable. 31 Closed the Interest Expense account. Year 2 Jan. 1 Reversed the adjusting entry
for accrued interest payable. 4 Bought various securities with sinking fund cash; cost, $ 59,625.
Apr. 1 Paid semiannual interest on the bonds. Oct. 1 Paid semiannual interest on the bonds.
Dec. 31 Recorded the receipt of $ 4,629 of income derived from sinking fund investments,
depositing the cash in the sinking fund. 31 Deposited $ 82,950 in the bond sinking fund. 31
Made an adjusting entry to record amortization of bond discount. 31 Made an adjusting entry to
record accrued interest payable. 31 Closed the Sinking Fund Income account. 31 Closed the
Interest Expense account. Required 1. Record the transactions in general journal form using
pages 140 and 141 of the general journal. 2. Post entries to the Discount on Bonds Payable
account, No. 242, and the Interest Expense account, No. 581. Label the adjusting, closing, and
reversing entries.View Solution: During two consecutive years Horton Medical Clinic completed
the following
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