A Soprano Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2010. The bonds were dated January
Question:
A Soprano Electric sold $3,000,000, 10%, 10-year bonds on January 1, 2010. The bonds were dated January 1 and pay interest July 1 and January 1. Soprano Electric uses the straight line method to amortize bond premium or discount.The bonds were sold at 104. Assume no interest is accrued on June 30.
Instructions
(a) Prepare the journal entry to record the issuance of the bonds on January 1, 2010.
(b) Prepare a bond premium amortization schedule for the first 4 interest periods.
(c) Prepare the journal entries for interest and the amortization of the premium in 2010 and 2011.
(d) Show the balance sheet presentation of the bond liability at December 31, 2011.
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Step by Step Answer:
a 2010 Jan 1 Cash 3000000 X 104 3120000 Bonds Payable 3000000 Premium on Bonds Payable 120000 c 2010 ...View the full answer
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
