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Crane Inc. issues $800,000 of 5-year, 9% bonds on January 1, 2021. The bonds pay interest annually. a) Calculate the issue price of the bonds
Crane Inc. issues $800,000 of 5-year, 9% bonds on January 1, 2021. The bonds pay interest annually.
a) Calculate the issue price of the bonds using a market rate of 8%.
b) Record the bond issue on Jan 1, 2021
c) Prepare an effective interest amortization table for the bonds
d) Prepare the journal entries to record the first three interest payments. Ignore any year-end accruals of interest.
e) Assuming Crane has an October 31 year end, prepare the adjusting entry for interest on October 31, 2021.
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