Question
Claire Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in two
Claire Corporation is planning to issue bonds with a face value of $100,000 and a coupon rate of 8 percent. The bonds mature in two years and pay interest quarterly every March 31, June 30, September 30, and December 31. All of the bonds were sold on January 1 of this year. Claire uses the effective-interest amortization method and also uses a discount account. Assume an annual market rate of interest of 12 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
1. Provide the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your final answers to nearest whole dollar amount.)
No | Date | General Journal | Debit | Credit |
---|---|---|---|---|
1 | January 01 | |||
2. Provide the journal entry to record the interest payment on March 31, June 30, September 30, and December 31 of this year.
No | Date | General Journal | Debit | Credit |
---|---|---|---|---|
1 | March 31 | |||
2 | June 30 | |||
3 | September 30 | |||
4 | December 31 | |||
|
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3. What bonds payable amount will Claire report on this year's December 31 balance sheet? (Round your final answers to nearest whole dollar amount.)
Bonds Payable:
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