Question: Henderson Inc issued a 652 000 14 10 year bond on October

Henderson Inc. issued a $652,000, 14% 10-year bond on October 1, 2014, for cash of $697,701. Interest is to be paid quarterly. The annual market rate of interest is 12.75%. Assume a year-end of February 28. A partial amortization schedule, using the effective interest method, is shown below.

a. Record the issuance of the bond on October 1, 2014.
b. Record the accrual of bond interest and premium amortization on February 28, 2015, the year-end, and the subsequent payment of interest on April 1,2015.
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  • CreatedJanuary 08, 2015
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