Question: Mellilo Corp issued 5 million of 20 year 9 5 bonds

Mellilo Corp issued $5 million of 20 year, 9.5% bonds on 7/1/2009, at 98. Interest is due on 6/30 and 12/31 of each year, and all of the bonds in the issue mature on 6/30/2009. Mellilo's fiscal year ends in 12/31,. Prepare the following J/E.
a.7/1/2009 to record the issuance of the bonds.
b.12/31/2009 to pay interest and amortize the bond discount....
c. 6/30/2029 to pay interest amortize the bond discount and retire the bonds at maturity (make two separate entries)........................
d. Briefly explain the effect of amortizing the bond disc. upon (1) annual net income and (2) annual net cash flow from operating activities. (Ignore possible income tax effects) ..

View Solution:

Sale on SolutionInn
  • CreatedSeptember 19, 2013
  • Files Included
Post your question