Assume the same information as in E14.4, except that Celine Dion Company uses the effective-interest method of
Question:
Assume the same information as in E14.4, except that Celine Dion Company uses the effective-interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.
In E14.4
Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2020, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the straight-line method of amortization for bond premium or discount.
Instructions
Prepare the journal entries to record the following. (Round to the nearest dollar.)
a. The issuance of the bonds.
b. The payment of interest and related amortization on July 1, 2020.
c. The accrual of interest and the related amortization on December 31, 2020.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel