Northland Corporation had $ 400,000, 10- year bonds outstanding on December 31, 2014 (end of the fiscal year). Interest is payable each December 31. The bonds were issued (sold) on January 1, 2014. The 2014 annual financial statements showed the following:
Statement of earnings
Bond interest expense (straight- line amortization) .. $ 33,200
Statement of financial position
Bonds payable (net liability) ............. 389,200
Required (show computations):
1. What was the issue price of the bonds? Prepare the journal entry to record the issuance of the bonds on January 1, 2014.
2. What was the coupon rate on the bonds? Prepare the entry to record interest expense for 2014.

  • CreatedAugust 04, 2015
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