Question
Bats corporation issued $800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2013,are dur March 31, 2017,
Bats corporation issued $800,000 of 12% face value bonds for 851,705.70. The bonds were dated and issued on April 1, 2013,are dur March 31, 2017, and pay interest semiannually on September 30 and MArch 31. Bats sold the bonds to yield 10%.
A.) Prepare a bond interest expense and premium amortization schedule using the effective interest method for 2013 and 2014.
B.) Prepare adjust entires for the end of the fiscal year, December 31, 2013, using the effective interest method.
C.) Assume the company retires the bonds on June 30, 2014, at 103 plus accrued interest. Prepare the journal entry to record the bond retirement using the effective interest method.
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