Nicholas Ram Corporation have a $2,400,000 bond issue dated March 1, 2016 due in 15 years with
Question:
Nicholas Ram Corporation have a $2,400,000 "bond issue" dated March 1, 2016 due in 15 years with an annual interest rate of 12%. Interest is payable March 1 and September 1. On August 1, 2016, the bond was sold for $2,505,000 plus accrued interest. Using the straight-line method, prepare the general journal entries for each of the following:
a) The issuance of the bond on August 1, 2016.
b) Payment of the semi-annual interest and the amortization of the premium on September 1, 2016.
c) Accrual of the interest and the amortization of the premium on December 31, 2016.
d) Payment of the semi-annual interest and the amortization of the premium on March 1, 2017.
Auditing and Assurance Services
ISBN: 978-1260152166
7th edition
Authors: Timothy Louwers, Allen Blay, David Sinason, Jerry Strawser, Jay Thibodeau