On May 1, 2024, MEM Corp. issued $900,000 of 5-year, 5% bonds at $861,614. This price resulted
Question:
On May 1, 2024, MEM Corp. issued $900,000 of 5-year, 5% bonds at $861,614. This price resulted in an effective interest rate of 6% on the bonds. The bonds pay interest semi-annually on May 1. MEM’s year end is April 30.
Instructions
a. Record the issue of the bonds on May 1, 2024.
b. Prepare an effective-interest amortization table for this bond.
c. Journalize the first four interest payments and applicable interest accruals.
d. Assume that on May 1, 2027, after payment of the interest, MEM redeems all of the bonds at 102. Record the redemption of the bonds.
Why would MEM elect to redeem the bonds early?
Step by Step Answer:
a b c d A company may elect to redeem outstanding ...View the full answer
Accounting Principles Volume 2
ISBN: 9781119786634
9th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
