For each of the bonds listed below, record the three requested journal entries. 1. The Dorchester Company
Question:
For each of the bonds listed below, record the three requested journal entries.
1. The Dorchester Company invested $100,000 of face amount of 5-year bonds. The bonds were purchased at 103 and bear interest at a stated rate of 8% per annum, payable semiannually.
(a) Prepare the journal entry to record the initial investment.
(b) Prepare the journal entry that Dorchester would record on each interest date.
(c) Prepare the journal entry that Dorchester would record at maturity of the bonds.
2. The Dorchester Company invested $100,000 of the face amount of 4-year bonds. The bonds were purchased at 98 and bear interest at a stated rate of 8% per annum, payable semiannually.
(a) Prepare the journal entry to record the initial investment.
(b) Prepare the journal entry that Dorchester would record on each interest date.
(c) Prepare the journal entry that Dorchester would record at the maturity of the bonds.
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello