Question

Assume the same facts as in E8-3 but prepare entries using straight-line amortization of bond discount or premium.

In E8-3
Wood Corporation owns 70 percent of Carter Company's voting shares. On January 1, 20X3, Carter sold bonds with a par value of $600,000 at 98. Wood purchased $400,000 par value of the bonds; the remainder was sold to nonaffiliates. The bonds mature in five years and pay an annual interest rate of 8 percent. Interest is paid semiannually on January 1 and July 1.



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  • CreatedMay 23, 2014
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