On January 1, 2023, Osborn Inc. sold 12% bonds having a maturity value of $800,000 for $860,652,
Question:
On January 1, 2023, Osborn Inc. sold 12% bonds having a maturity value of $800,000 for $860,652, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2023, and mature on January 1, 2028, with interest payable on January 1 of each year. The company follows IFRS and uses the effective interest method. Round calculations to the nearest dollar.
Instructions
a. Prepare the journal entry at the date of issue.
b. Prepare a schedule of interest expense and bond amortization for 2023 through 2026.
c. Prepare the journal entries to record the interest payment and the amortization for 2023.
d. Prepare the journal entries to record the interest payment and the amortization for 2025.
e. If Osborn prepares financial statements in accordance with ASPE, can Osborn choose a different method of amortizing any premium or discount on its bonds payable? Explain your answer.
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a b c d e Accounting standards for private enterprises do not specify tha...View the full answer
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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
