Question

On July 1, 2009, the Nicholsen Corporation issued $300,000 of bonds, with a 13% face rate of interest, for $318,000. The bonds pay interest semiannually on each January 1 and July 1 and are to be repaid in three equal semiannual installments beginning July 1, 2011. Assume the company’s fiscal year ends May 31 and it makes reversing entries for year-end accruals.

Required
Prepare the journal entries to account for this serial bond issue on each of the following dates, using the bonds outstanding method of amortization:
1. July 1, 2009
2. January 1, 2010
3. July 1, 2010
4. January 1, 2011
5. July 1, 2011
6. January 1, 2012
7. July 1, 2012



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  • CreatedDecember 09, 2013
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