On September 1, 2015, Bathurst Ltd. issued $30,000,000 of four-year, 7% bonds at an effective interest rate

Question:

On September 1, 2015, Bathurst Ltd. issued $30,000,000 of four-year, 7% bonds at an effective interest rate of 6%, receiving cash of $31,052,974 plus accrued interest. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year-end of the company is January 31.
Instructions
1. Journalize the entry to record the amount of cash proceeds from the sale of the bonds.
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, 2015, and the amortization of the bond premium, using the straight-line method.
b. The adjusting entry for interest expense at the January 31, 2016, year-end.
c. The interest payment on June 30, 2016, and the amortization of the bond premium.
3. Prepare the long-term liabilities section of the balance sheet for Bathurst Ltd. as at January 31, 2016, rounding to the nearest whole dollar.
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: