On March 1, 2010, Knap Corporation issued $1,200,000 of 6 percent, five-years bonds. The semiannual interest payments dates are February 28 and August 31. Because the market rate for similar investments was 7 percent, the bonds had to be issued
On March 1, 2010, Knap Corporation issued $1,200,000 of 6 percent, five-years bonds. The semiannual interest payments dates are February 28 and August 31. Because the market rate for similar investments was 7 percent, the bonds had to be issued at a discount. The discount on the issuance of the bonds was $49,900. The company’s fiscal year ends February 28. Prepare entries in journal form to record the bond issue on March 1, 2010, the payment of interest, and the amortization of the discount on August 31, 2010 and on February 28, 2011. Use the effective interest method.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Chapter #
13
Section: Exercises
Problem: 12
Posted Date: February 23, 2012 02:35:52
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