On July 1, 2012, Nicholsen Corporation issued $300,000 of bonds, with a 13% stated rate of interest,
Question:
On July 1, 2012, Nicholsen Corporation issued $300,000 of bonds, with a 13% stated rate of interest, for $318,000. The bonds pay interest semiannually on each January 1 and July 1 and are to be repaid in three equal semiannual installments beginning July 1, 2014. Assume Nicholsen's fiscal year ends May 31 and it makes reversing entries for year-end accruals.
Required:
Prepare the journal entries to account for this serial bond issue on each of the following dates using the bonds outstanding method of amortization:
1. July 1, 2012
2. January 1, 2013
3. July 1, 2013
4. January 1, 2014
5. July 1, 2014
6. January 1, 2015
7. July 1, 2015
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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1 2012 July 1 Cash 318000 Bonds Payable 300000 Premium on Bonds Payable 18000 2 2013 Jan 1 Interest Expense 15900 Premium on Bonds Payable 3600 Cash 1...View the full answer
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Related Book For 
Intermediate Accounting Reporting and Analysis
ISBN: 978-1111822361
1st edition
Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach
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