On January 1, 201X, Acorn Corporation issued $300,000 of 10%, 10-year bonds for $265,650, yielding a market

Question:

On January 1, 201X, Acorn Corporation issued $300,000 of 10%, 10-year bonds for $265,650, yielding a market rate of 12%. Interest is paid on July 1 and December 31. Acorn uses the interest method to amortize the discount.

1. Prepare an amortization schedule for the first three semiannual periods.

2. Prepare journal entries to record the following:

a. Bond issue on January 1.

b. Semiannual interest payments on July 1 and December 31 as well as amortization of discount.

3. If the bond were issued on March 1 and interest was paid on September 1 and March 1, what would be the year-end adjusting entry on December 31, 201X, to record accrued interest and amortization of discount?

Corporation
A 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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