On March 1, 2010, Fast Freight Company sold $400,000 of its 9.5 percent, 20-year bonds at 106.
Question:
On March 1, 2010, Fast Freight Company sold $400,000 of its 9.5 percent, 20-year bonds at 106. The semiannual interest payment dates are March 1 and September 1. The market interest rate is 8.9 percent. The firm’s fiscal year ends August 31. Prepare entries in journal form 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:
2010 Mar 1 Cash 424000 Unamortized Bond Premium 24000 Bonds Payable 400000 Sold 95 ...View the full answer
Financial and Managerial Accounting
ISBN: 978-1439037805
9th edition
Authors: Belverd E. Needles, Marian Powers, Susan V. Crosson
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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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