On January 1, 2019, Shields, Inc., issued $800,000 of 9%, 20-year bonds

On January 1, 2019, Shields, Inc., issued $800,000 of 9%, 20-year bonds for $879,172, yielding market (yield) rate of 8%. Semiannual interest is payable on June 30 and December 31 of each year.

a. Show computations to confirm the bond issue price.

b. Prepare journal entries to record the bond issuance, semiannual interest payment, and premium amortization on June 30, 2019, and semiannual interest payment and premium amortization on December 31, 2019. Use the effective interest rate method.

c. Post the journal entries from part b to their respective T-accounts.

d. Record each of the transactions from part b in the financial statement effects template.

Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members