(Entries for Bond Transactions) On January 1, 2010, Osborn Company sold 12% bonds having a maturity value...

Question:

(Entries for Bond Transactions) On January 1, 2010, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2010, and mature January 1, 2015, with interest payable December 31 of each year. Osborn Company allocates interest and unamortized discount or premium on the effective interest basis.

(a) Prepare the journal entry at the date of the bond issuance.

(b) Prepare a schedule of interest expense and bond amortization for 2010–2012.

(d) Prepare the journal entry to record the interest payment and the amortization for 2012.

Bonds
When companies need to raise money, issuing bonds is one way to do it. A bond functions as a loan between an investor and a corporation. The investor agrees to give the corporation a specific amount of money for a specific period of time in exchange... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...