BONDS ISSUED AT A PREMIUM, REDEEMED AT A LOSS Blackwell Company issued the following bonds at a
Question:
BONDS ISSUED AT A PREMIUM, REDEEMED AT A LOSS Blackwell Company issued the following bonds at a premium:
Date of issue and sale: .....March 1, 20-1
Principal amount: .......$500,000
Sale price of bonds: ......103
Denomination of bonds: .....$1,000
Life of bonds: .........20 years
Stated rate: ..........12%, payable semiannually on August
...............31 and February 28
REQUIRED
Prepare journal entries for:
(a) Issuance of the bonds.
(b) Interest payment and premium amortization on the bonds on August 31, 20-1.
(c) Year-end adjustment on the bonds for 20-1.
(d) Reversing entry for the beginning of 20-2.
(e) Redemption of $50,000 of the bonds on March 1, 20-6, at 106.
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