Question: On January 1 201X Acorn Corporation issued 600 000 of 10

On January 1, 201X, Acorn Corporation issued $600,000 of 10%, 20-year bonds for $509,580, yielding a market rate of 12%. Interest is paid on July 1 and December 31. Acorn uses the interest method to amortize the discount.
1. Prepare an amortization schedule for the first three semiannual periods.
2. Prepare journal entries to record the following:
a. Bond issue on January 1.
b. Semiannual interest payments on July 1 and December 31 as well as amortization of discount.
3. If the bond were issued on March 1 and interest was paid on September 1 and March 1, what would be the year-end adjusting entry on December 31, 201X, to record accrued interest and amortization of discount?

View Solution:

Sale on SolutionInn
  • CreatedApril 24, 2014
  • Files Included
Post your question