On January 1, 2019, Shields, Inc., issued $800,000 of 9%, 20-year bonds for $879,172, yielding market (yield)

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On January 1, 2019, Shields, Inc., issued $800,000 of 9%, 20-year bonds for $879,172, yielding market (yield) rate of 8%. Semiannual interest is payable on June 30 and December 31 of each year.

a. Show computations to confirm the bond issue price.

b. Prepare journal entries to record the bond issuance, semiannual interest payment, and premium amortization on June 30, 2019, and semiannual interest payment and premium amortization on December 31, 2019. Use the effective interest rate method.

c. Post the journal entries from part b to their respective T-accounts.

d. Record each of the transactions from part b in the financial statement effects template.

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Related Book For  book-img-for-question

Financial Accounting

ISBN: 9781618533111

6th Edition

Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman

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