On January 1, 2016, the Mill Road Corporation, a U. S. GAAP reporter, issued $ 300,000 par

Question:

On January 1, 2016, the Mill Road Corporation, a U. S. reporter, issued $ 300,000 par value, 5%, five- year bonds. Interest is payable semiannually each January 1 and July 1 with the first interest payment due at the end of the period on July 1, 2016. The market rate of interest on the date of the bond issue was 8%. The company’s fiscal year ends on December 31.
Required
a. Determine the issue price of the debt.
b. Prepare the amortization table for the bond issue, assuming that Mill Road uses the effective interest rate method of amortization.
c. Prepare the journal entries to record the bond issue, the first interest entry, and payment of the bonds at maturity. Assume the company uses a premium or discount account, if needed. GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...