1 a. On January 1 of Year 1, Congo Express Airways issued $4,000,000 of 6% bonds that...
Question:
1
a. On January 1 of Year 1, Congo Express Airways issued $4,000,000 of 6% bonds that pay interest semiannually on January 1 and July 1. The bond issue price is $3,630,000 and the market rate of interest for similar bonds is 7%. The bond premium or discount is being amortized at a rate of $12,333 every six months. The amount of interest expense recognized by Congo Express Airways on the bond issue in Year 1 would be?
b. On January 1, Year 1, Stratton Company borrowed $260,000 on a 10-year, 10% installment note payable. The terms of the note require Stratton to pay 10 equal payments of $42,314 each December 31 for 10 years. The required general journal entry to record the payment on the note on December 31, Year 2 is?
Intermediate Accounting
ISBN: 978-1118300855
10th Canadian Edition Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy