Question

On February 1, 2017, Jura Corp. (Jura) issued an $8,000,000 bond with a 7 percent coupon rate and a maturity date of January 31, 2023. Interest is paid annually on January 31. The effective interest rate for a bond of this type on February 1, 2017 was 7 percent. Jura's year-end is January 31.

Required:
a. What will the proceeds from the bond issue be?
b. Prepare the journal entry to record the issue of the bond on February 1, 2017.
c. Prepare an amortization schedule using the effective interest rate method for any premium or discount that arose on issue of the bond.
d. Prepare the journal entry required to record the interest expense on January 31, 2018, 2020, and 2022.
e. Prepare the journal entry required to record the retirement of the bond on maturity.



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  • CreatedFebruary 26, 2015
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