Question

On November 1, 2017, Nordin Inc. (Nordin) issued a $5,000,000 bond with a 6 percent coupon rate and a maturity date of October 31, 2022.
Interest is paid semi-annually on April 30 and October 31. The effective interest rate for a bond of this type on November 1, 2017 was 8 percent. Nordin's year-end is October 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 November 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 April 30 and October 31, 2018 and 2020.
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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