On June 1, 2017, Joffre Inc. (Joffre) issued a $6,000,000, 10-year bond with an 8 percent coupon
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On June 1, 2017, Joffre Inc. (Joffre) issued a $6,000,000, 10-year bond with an 8 percent coupon rate. Proceeds from the bond issue were $6,421,415. Interest is to be paid annually on May 31. Joffre's year-end is December 31.
Assume that Joffre uses the effective interest rate method to amortize any bond premiums or discounts.
Required:
a. Prepare the journal entry to record the issue of the bond on June 1, 2017.
b. Prepare the journal entry to accrue the interest expense on December 31, 2017.
c. Prepare the journal entry to record the payment of interest to bondholders on May 31, 2018.
CouponA coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...
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a b c Effective Interest Method Dr Cash Issue date Maturity date Face V...View the full answer
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