Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2021, at a price
Question:
Duval Co. issues four-year bonds with a $100,000 par value on January 1, 2021, at a price of $95,952. The annual contract rate is 7%, and interest is paid semiannually on June 30 and December 31.
1. Prepare a straight-line amortization table like Exhibit 14.7 for these bonds.
2. Prepare journal entries to record the first two interest payments.
3. Prepare the journal entry for maturity of the bonds on December 31, 2024 (assume semiannual interest is already recorded).
Exhibit 14.7
EXHIBIT 14.7 Semiannual Unamortized Carrying Period-End Discount Value Straight-Line Amortization of Bond Discount (0) 12/31/2021 .... $3,600 $ 96,400 (1) 6/30/2022 .... 2,700 97,300 (2) 12/31/2022.... 1,800 98,200 (3) 6/30/2023 .... 900 99,100 (4) 12/31/2023.... 100,000 The columns always sum to par value for discount bonds.
Step by Step Answer:
Answer 1 Bond Amortization Schedule StraightLine Amortization Face Value 100000 Bond Price 95952 Tot...View the full answer
Related Video
A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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