Frauts Corporation issued $600,000 of 10-year, 8% bonds on January 1, 2014, for $642,637. This price resulted

Question:

Frauts Corporation issued $600,000 of 10-year, 8% bonds on January 1, 2014, for $642,637. This price resulted in a market interest rate of 7% on the bonds. Interest is payable semi-annually on July 1 and January 1. Frauts has a December 31 year end. On January 1, 2015, immediately after making and recording the semi-annual interest payment, the bonds were redeemed at 104.

Instructions

(a) Record the issue of the bonds on January 1, 2014.

(b) Prepare an amortization schedule through to December 31, 2015 (four interest periods).

(d) Record the accrual of interest on December 31, 2014.

(e) Record the redemption of the bonds on January 1, 2015?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...