On January 1, 2016, Organic Products issued $ 1,200,000 par value, 7%, five- year bonds. Interest is

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On January 1, 2016, Organic Products issued $ 1,200,000 par value, 7%, five- year bonds. Interest is payable semiannually at the end of the period. The market rate of interest on the date of the bond issue was 6%.
Required
a. Determine the issue price of the debt.
b. Prepare the amortization table for the bond issue, assuming that Organic Products uses the effective interest rate method of amortization.
c. Prepare the journal entry to record the bond issue. Assume the company uses a premium or discount account, if needed.
d. Prepare the journal entry to record the early retirement of the bonds at the end of the third year (December 31, 2018) for $ 1,265,000.
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Related Book For  book-img-for-question

Intermediate Accounting

ISBN: 978-0132162302

1st edition

Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

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