On March 1, 2009, Oregon Gas & Electric issued $100 million of 20-year, 9% debentures. Proceeds were

Question:

On March 1, 2009, Oregon Gas & Electric issued $100 million of 20-year, 9% debentures. Proceeds were $91,420,000, implying a market interest rate of 10%. Show all amounts in thousands of dollars.

1. By using the balance sheet equation format, prepare an analysis of bond transactions. Assume effective interest amortization. Show entries for the issuer concerning

(a) Issuance,

(b) First semiannual interest payment,

2. Show all the corresponding journal entries for (a), (b), and (c) in requirement 1.

3. Show how the bond-related accounts would appear on the balance sheets as of March 1, 2009, and March 1, 2010. Assume the March 1 interest payment and amortization of bond discount have been made.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...