On September 1, 2017, Praise Corporation issued $600,000 of 10-year, 3% bonds at 96. Interest is payable
Question:
On September 1, 2017, Praise Corporation issued $600,000 of 10-year, 3% bonds at 96. Interest is payable semi-annually on September 1 and March 1. Praise's fiscal year end is February 28.
Instructions
(a) Is the market rate of interest higher or lower than 3%? Explain.
(b) Record the issue of the bonds on September 1, 2017.
(c) Record the accrual of interest on February 28, 2018, assuming the semi-annual amortization amount for this interest period is $1,014.
(d) Record the payment of interest on March 1, 2018.
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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Related Book For
Accounting Principles
ISBN: 978-1119048473
7th Canadian Edition Volume 2
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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