Cola, Inc., issued a year, 10%, $1,500,000 bond on January 1, 20X9 dated as of January 1,

Fantastic news! We've Found the answer you've been seeking!

Question:

Cola, Inc., issued a year, 10%, $1,500,000 bond on January 1, 20X9 dated as of January 1, 20X9. The bond pays interest every June 30 and December 31, with the principal to be paid at the end of 12 years. The effective interest rate on the bond is 12%. The company uses effective-interest amortization.

Given this information and using the present value tables

a. Prepare journal entries for Cola, Inc., on each of the following dates:

1) January 1, 20X9

2) June 30, 20X9

3) December 31, 20X9

b. What is the total interest expense for the year ended December 31, 20X9?

c. What is the balance sheet presentation of this bond for Cola, Inc., at December 31, 20X9?