Question
Bonds Payable Sold at a Premium; Effective Interest Amortization On December 31, Coffey Company issued $300,000 of 15-year, ten percent bonds payable for $351,780, yielding
Bonds Payable Sold at a Premium; Effective Interest Amortization
On December 31, Coffey Company issued $300,000 of 15-year, ten percent bonds payable for $351,780, yielding an effective interest rate of eight percent. Interest is payable semiannually on June 30 and December 31. Determine the financial statement effect of: (a) the issuance of the bonds (b) the first semiannual interest payment and premium amortization (effective interest method) on June 30 (c) the second semiannual interest payment and premium amortization on December 31
Round amounts to the nearest dollar.
| Balance Sheet | Income Statement | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Transaction | Assets | = | Liabilities | + | Equity | Revenues | - | Expenses | = | Net Income | |||
| a. Bond issuance | 351780 | 351780 | 0 | 0 | 0 | 0 | |||||||
| b. First interest payment and premium amortization |
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| c. Second interest payment and premium amortization |
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Management And Compliance Audit A Complete Guide
Authors: Gerardus Blokdyk
2020 Edition
0655927727, 978-0655927723
