Morneau Automation Ltd. issued 6%, 10-year bonds with a face value of $100 million at par on
Question:
Morneau Automation Ltd. issued 6%, 10-year bonds with a face value of $100 million at par on May 1, 2024. The bonds pay interest on October 31 and April 30 each year. The first interest payment was made on October 31, 2024. Morneau’s year end is December 31.
Required
a. Determine the cash received on issuance and the yield for the 10-year bonds issued by Morneau Automation.
b. Prepare the journal entry for the issuance of the bond.
c. Prepare the journal entries required at October 31 and December 31, 2024, and the entry for the interest payment on April 30, 2025.
Step by Step Answer:
a The cash received on issuance was equal to the face value of the bonds issued 100000000 asthe bond ...View the full answer
Understanding Financial Accounting
ISBN: 9781119715474
3rd Canadian Edition
Authors: Christopher D. Burnley
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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