On December 31, Coffey Company issued $300,000 of 15-year, ten percent bonds payable for $351,780, yielding...

 

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On December 31, Coffey Company issued $300,000 of 15-year, ten percent bonds payable for $351,780, yielding an effec- tive interest rate of eight percent. Interest is payable semiannually on June 30 and December 31. Determine the financial statement effect of (a) the issuance of the bonds. (b) the first semiannual interest payment and premium amortization (effective interest method) on June 30, and (c) the second semiannual interest payment and premium amortization on December 31. Round amounts to the nearest dollar. On December 31, Coffey Company issued $300,000 of 15-year, ten percent bonds payable for $351,780, yielding an effec- tive interest rate of eight percent. Interest is payable semiannually on June 30 and December 31. Determine the financial statement effect of (a) the issuance of the bonds. (b) the first semiannual interest payment and premium amortization (effective interest method) on June 30, and (c) the second semiannual interest payment and premium amortization on December 31. Round amounts to the nearest dollar.