The Gorman Group issued $900,000 of 13% bonds on June 30, 2011, for $967,707. The bonds were
Question:
The Gorman Group issued $900,000 of 13% bonds on June 30, 2011, for $967,707. The bonds were dated on June 30 and mature on June 30, 2031 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30.
Required:
1. Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2011.
2. Prepare the journal entry to record interest on December 31, 2011 (at the effective rate).
3. Prepare the journal entry to record interest on June 30, 2012 (at the effective rate).
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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1 June 30 2011 Cash price given 967707 Bonds payable face amount 900000 ...View the full answer
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Related Book For 
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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