XYZ Corporation issued a bond with a face value of $1,000,000 on January 1, 2022. The bond
Question:
XYZ Corporation issued a bond with a face value of $1,000,000 on January 1, 2022. The bond has a stated interest rate of 6%, with interest payable annually on December 31. The bond has a maturity date of December 31, 2026. On January 1, 2023, the bond was sold to another company for $990,000, and the new owner will receive the remaining interest payments and the principal payment at maturity.
Prepare the journal entries for the bond issuance, the interest payment on December 31, 2022, the bond sale on January 1, 2023, and the amortization of the bond discount for the year ended December 31, 2023. Also, calculate the amount of interest expense, interest payable, and bond discount amortization for the year ended December 31, 2023.
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella