Question

On January 1, 2014, Clearwater Corporation sold a $750,000, 8 percent bond issue (9 percent market rate). The bonds were dated January 1, 2014, pay interest each December 31, and mature in 10 years.

Required:
1. Give the journal entry to record the issuance of the bonds.
2. Give the journal entry to record the interest payment on December 31, 2014. Use straight-line amortization.
3. Show how the interest expense and the bonds payable should be reported on the December 31, 2014, annual financial statements.



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  • CreatedJuly 01, 2014
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