BONDS ISSUED AT A DISCOUNT Brandon, Inc., issued the following bonds at a discount: Date of issue

Question:

BONDS ISSUED AT A DISCOUNT Brandon, Inc., issued the following bonds at a discount:

Date of issue and sale: .....April 1, 20-1

Principal amount: .......$600,000

Sale price of bonds: .......96

Denomination of bonds: ...$1,000

Life of bonds: .......10 years

Stated rate: ........7%, payable semiannually on

.............September 30 and March 31

REQUIRED

1. Prepare journal entries for:

(a) Issuance of the bonds at a discount.

(b) Interest payment and discount amortization on the bonds on September 30, 20-1.

(c) Year-end adjustment on the bonds for 20-1.

(d) Reversing entry for the beginning of 20-2.

(e) Interest payments and discount amortization on the bonds for 20-2 (March

31 and September 30).

2. Calculate the carrying value of the bonds on September 30, 20-2.

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Related Book For  answer-question

College Accounting

ISBN: 978-0538745192

20th Edition

Authors: Heintz and Parry

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