Solecki Corporation assembles and distributes fans. Solecki Corporation sold $4,000,000 five-year, 8% bonds on January 1, 2011.

Question:

Solecki Corporation assembles and distributes fans. Solecki Corporation sold $4,000,000 five-year, 8% bonds on January 1, 2011. The bonds pay interest on June 30 and December 31 and were issued at an effective interest rate of 7%, resulting in Solecki Corporation receiving cash of $4,166,332. Solecki Corporation is a privately held company and has chosen to use the straight-line method of amortization.
Journalize the entries to record the following:
1. Sale of the bonds on January 1, 2011.
2. First semiannual interest payment and premium amortization.
3. Final semiannual interest payment and premium amortization on December 31, 2015.
4. Maturity of the bond on December 31, 2015.
Corporation
A 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...
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...
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting Volume 2

ISBN: 978-0176509743

2nd Canadian edition

Authors: James Reeve, Jonathan Duchac, Sheila Elworthy, Carl S. Warren

Question Posted: