On July 1, 2012, Francesca Company issued $4,000,000 face value, 8%, 10-year bonds at $3,501,514. This price
Question:
On July 1, 2012, Francesca Company issued $4,000,000 face value, 8%, 10-year bonds at $3,501,514. This price resulted in an effective-interest rate of 10% on the bonds. Francesca uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.
Required
a) Prepare all journal entries to record the following transactions.
The issuance of the bonds on July 1, 2012
The accrual of interest and the amortization of the discount on December 31, 2012.
The payment of interest and the amortization of the discount on July 1, 2013, assuming no The accrual of interest and the amortization of the discount on December 31, 2013.
accrual of interest on June 30.
Payment of interest, amortization of discount, on July 1, 2014, assuming no accrual of interest.
Financial accounting
ISBN: 978-1118285909
IFRS Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel