On April 1 2011 Arnwine Supply issued 50 000 000 in
On April 1, 2011, Arnwine Supply issued $ 50,000,000 in 15- year, 10 percent bonds that pay interest annually on April 1. The bonds were issued on April 1, 2009, when the market interest rate was 11 percent. Arnwine Supply’s fiscal year ends December 31.
Required:
A. Make the amortization schedule for this bond issue.
B. Prepare the journal entries for the first two years of the bond issue’s life.
C. Show how Arnwine Supply reports the events involving the bond issue on its income statement, balance sheet, and statement of cash flows for the years ended December 31, 2011, and December 31, 2012.
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