Wakefield Construction Company sold $10,000,000 five-year, 6% callable bonds on June 30, 2011. The bonds pay interest
Question:
Wakefield Construction Company sold $10,000,000 five-year, 6% callable bonds on June 30, 2011. The bonds pay interest on December 31 and June 30 and were issued at an effective interest rate of 7%, resulting in Wakefield receiving cash of $9,584,169.73. The company uses the effective interest method of amortization.
Journalize the entries to record the following selected transactions:
1. Sale of the bonds on June 30, 2011.
2. First semiannual interest payment and discount amortization on December 31, 2011.
3. Sixth semiannual interest payment and discount amortization on June 30, 2014.
4. Wakefield Company called $5,000,000 of the bond issue at 103, the rate provided in the bond indenture, on June 30, 2014.
5. Seventh semiannual interest payment and discount amortization, on December 31, 2014.
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1 2011 Jun 30 Cash 958420000 Discount on Bonds Payable 41580000 Bonds Payable 1000000000 2 Dec 31 In...View the full answer
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