Samford Corporation sold $600,000, 7%, 10-year bonds on January 1, 2014. The bonds pay interest semiannually on June 30th and December 31st. The company uses straight-line amortization for premiums and discounts.

1. Prepare the journal entry on January 1, 2014 to record the issuance of the bonds assuming they sold at 101.

2. Prepare the journal entry necessary on June 30th to record the first interest payment.

3. Calculate the carrying value of the bonds at the end of the fourth year (December 31, 2017).

4. Assume the bonds are callable after December 31, 2019. Prepare the journal entry to redeem the bonds on January 1, 2020 if the call price is 100.5.

Answer rating: 100% (QA)

1 Journal Entry on January 1 2014 to record the issuance of the bonds assuming they sold at 101 Date ... View the full answer