Learning Case #$10$B

Chapter $10$

On January $1,2021,$ Desmond Corporation issued $$50,000,7\%$ bonds $(5\%$ APR market rate$)$ for $$52,723.$ The bonds were dated January $1,2021,$ paying interest on January $1^{st}$ each year, and mature in $3$ years.

Required $-$ Round all answers to the nearest whole dollar.

Prepare the journal entry to record the issuance of the bonds.

Prepare the journal entries for the accrual of interest and the premium or discount amortization on December $31,2021,$ using the effective$-$interest amortization method.

Prepare the journal entries for the payment of interest on January $1,2022$

Determine the carrying value of the bonds on January $1,2022.$

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