On March 1, 2011, Speedy Freight Company sold $200,000 of its 9.5 percent, 20-year bonds at 106.
Question:
On March 1, 2011, Speedy Freight Company sold $200,000 of its 9.5 percent, 20-year bonds at 106. The semiannual interest payment dates are March 1 and September 1. The 1market interest rate is 8.9 percent. The firm’s fiscal year ends August 31.
Prepare journal entries to record the sale of the bonds on March 1, the accrual of interest and amortization of premium on August 31, and the first interest payment on September 1. Use the effective interest method to amortize the premium.
Step by Step Answer:
2011 Mar Aug Sept 1 Cash Unamortized Bond Premium Bonds Payable Sold 95 20year bond...View the full answer
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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