BONDS ISSUED AT A PREMIUM Bunkichi Corporation issued the following bonds at a premium: Date of issue

Question:

BONDS ISSUED AT A PREMIUM Bunkichi Corporation issued the following bonds at a premium:

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

Principal amount: ........$800,000

Sale price of bonds: .......103

Denomination of bonds: ......$1,000

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

Stated rate: ..........8%, payable semiannually on August

.................31 and February 28

REQUIRED

1. Prepare journal entries for:

(a) Issuance of the bonds at a premium.

(b) Interest payment and premium amortization on the bonds on August 31, 20-1.

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

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

(February 28 and August 31).

2. Calculate the carrying value of the bonds on August 31, 20-2.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...