Question: Hartl Enterprises issued ten 1 000 bonds on September 30 2014

Hartl Enterprises issued ten $1,000 bonds on September 30, 2014, with a stated annual interest rate of 8 percent. These bonds will mature on October 1, 2024, and have an effective rate of 10 percent. Interest is paid semiannually on October 1 and April 1. The first interest payment will be made on April 1, 2015.

a. Without computing the present value of the bonds, will they be issued at par value, at a discount, or at a premium? Explain your answer.
b. Prepare the entry to record the issuance of the bonds on September 30, 2014.
c. Prepare any adjusting journal entries necessary on December 31, 2014.
d. Prepare the entry to record the interest payment on April 1, 2015.

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  • CreatedAugust 19, 2014
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