On January 1 , 2020, Zing Co. issued $176,000 of six-year, 10% bonds when the market rate

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On January 1 , 2020, Zing Co. issued $176,000 of six-year, 10% bonds when the market rate was 8%. The issue price of the bonds was $192,110. Zing Co. uses the effective interest method to amortize the premium. Semiannual interest payments are made on June 30 and December 31 of each year.
Required:
1) Record the Journal Entry for the issuance of the bonds on Jan 1, 2020.

When using the effective-interest amortization method, the amount of the interest expense is calculated using the carrying value of the bonds and the market interest rate.

True

False

2) Record the Journal Entry on June 30, for the payment of interest and amortization of premium.

Posted Date: Nov 15, 2021 08:00 PM

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On January 1 , 2020, Zing Co. issued $176,000 of six-year, 10% bonds when the market rate

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1 Journal Date Account Title and Explanation Debit Credit Jan 1 2020 Cash 192110 Bonds payable 17600... View the full answer

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