Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2013, at 102. Interest is payable
Question:
Foreman Company issued $800,000 of 10%, 20-year bonds on January 1, 2013, at 102. Interest is payable semiannually on July 1 and January 1. Foreman Company uses the straight-line method of amortization for bond premium or discount.
Instructions
Prepare the journal entries to record the following.
(a) The issuance of the bonds.
(b) The payment of interest and the related amortization on July 1, 2013.
(c) The accrual of interest and the related amortization on December 31, 2013.
Step by Step Answer:
a The issuance of the bonds Debit Cash 820000 Credit Bond Payable 800000 Credit Bond Premium 2...View the full answer
Related Video
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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