The following information relates to a bond issue of Hickory Products, Inc.: Instructions: a. Prepare journal entries
Question:
The following information relates to a bond issue of Hickory Products, Inc.:
Instructions:
a. Prepare journal entries to record (1) the bond issuance on January 1, 19X4; (2) the semiannual interest payment and premium amortization on June 30, 19X4; and (3) the semiannual interest payment amortization on December 31, 19X4.
b. Compute total both interest expense for 19X4.
c. What is the net carrying value of Hickory’s bound on December 31, 19X4? Show how this amount would be disclosed on the company’s year-end balance sheet.
d. Assume that the entire bond issue was called at 103 at the start of business on July 1, 19X5. If the interest payment and premium amortization were handled correctly on June 30, prepare the necessary journal entry to record the bond retirement.
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso