Question: Roswell Corporation sold 4 000 000 8 10 year bonds on January 1

Roswell Corporation sold $4,000,000, 8%, 10-year bonds on January 1, 2014. The bonds were dated January 1, 2014, and pay interest on July 1 and January 1. Roswell Corporation uses the straight-line method to amortize bond premium or discount. Assume no interest is accrued on June 30.

(a) Prepare all the necessary journal entries to record the issuance of the bonds and bond interest expense for 2014, assuming that the bonds sold at 103.
(b) Prepare journal entries as in part (a) assuming that the bonds sold at 96.
(c) Show balance sheet presentation for the bonds at December 31, 2014.

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  • CreatedJanuary 30, 2014
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