The Town of Moosawaw issued $1 million of five-year, 5% bonds dated January 1, 2014. Interest is
Question:
The Town of Moosawaw issued $1 million of five-year, 5% bonds dated January 1, 2014. Interest is payable semi-annually on July 1 and January 1.
(a) Record the sale of these bonds on January 1, 2014, and the first interest payment on July 1, 2014, assuming that the bonds were issued at 98 and that the semi-annual amortization amount for the first interest period is $1,766.
(b) Record the sale of these bonds on January 1, 2014, and the first interest payment on July 1, 2014, assuming that the bonds were issued at 100.
(c) Record the sale of these bonds on January 1, 2014, and the first interest payment on July 1, 2014, assuming that the bonds were issued at 102 and that the semi-annual amortization amount for the first interest period is $1,804.
(d) What will be the amortized cost at maturity, January 1, 2019, under each of the three different issue prices?
Step by Step Answer:
a Jan 1 Cash 1000000 98 980000 Bonds Payable 980000 July 1 Interest Expense 25000 ...View the full answer
Accounting Principles Part 3
ISBN: 978-1118306802
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
