Patino Company issued $400,000, 9%, 20-year bonds on January 1, 2010, at 103. Interest is payable semiannually
Question:
Patino Company issued $400,000, 9%, 20-year bonds on January 1, 2010, at 103. Interest is payable semiannually on July 1 and January 1. Patino uses straight-line amortization for bond premium or discount.
Instructions
Prepare the journal entries to record the following.
(a) The issuance of the bonds.
(b) The payment of interest and the premium amortization on July 1, 2010, assuming that interest was not accrued on June 30.
(c) The accrual of interest and the premium amortization on December 31, 2010.
(d) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.
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Step by Step Answer:
a Jan 1 Cash 400000 X 103 412000 Premium on Bonds Payable 12000 Bonds Pay...View the full answer
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Related Book For 
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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