Question: please solve the entire problem Problem 14-5 In each of the following independent cases, the company closes its books on December 31. 1. Bridgeport Co.
Problem 14-5 In each of the following independent cases, the company closes its books on December 31. 1. Bridgeport Co. sells $514,000 of 8% bonds on March 1,2017 . The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1,2020 . The bonds yield 12%. (a) Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (b) Prepare all of the relevant journal entries from the time of sale until the date indicated. (Assume that no reversing entries were made.) 2. Indigo Co. sells $376,000 of 12% bonds on June 1,2017 . The bonds pay interest on December 1 and June 1 . The due date of the bonds is June 1,2021 . The bonds yield 8%. On October 1 , 2018 , Indigo buys back $116,560 worth of bonds for $120,560 (includes accrued interest). (a) Prepare a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (b) Prepare all of the relevant journal entries from the time of sale until the date indicated. Give entries through December 1,2019 . (Assume that no reversing entries were made.)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
