BONDS ISSUED AT FACE VALUE Ramona Arroyo Co. issued the following bonds: Date of issue and sale: ....April 1, 20-1 Principal amount: ......$250,000 Sale price of bonds: .....100 Denomination of bonds: ....$5,000 Life of bonds: ........10 years Stated rate: ..........9%, payable semiannually on September ..............30 and March 31 REQUIRED Prepare journal entries for: (a) Issuance of the bonds. (b) Interest
Chapter 22, EXERCISES SERIES B #8
BONDS ISSUED AT FACE VALUE Ramona Arroyo Co. issued the following bonds:
Date of issue and sale: ....April 1, 20-1
Principal amount: ......$250,000
Sale price of bonds: .....100
Denomination of bonds: ....$5,000
Life of bonds: ........10 years
Stated rate: ..........9%, payable semiannually on September
..............30 and March 31
REQUIRED
Prepare journal entries for:
(a) Issuance of the bonds.
(b) Interest payment 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 on the bonds for 20-2 (March 31 and September 30).
(f) Redemption at maturity.
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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