Question
Cupola Fan Corporation issued 12%, $430,000, 10-year bonds for $412,000 on June 30, 2016. Debt issue costs were $1,800. Interest is paid semiannually on December
Cupola Fan Corporation issued 12%, $430,000, 10-year bonds for $412,000 on June 30, 2016. Debt issue costs were $1,800. Interest is paid semiannually on December 31 and June 30. One year from the issue date (July 1, 2017), the corporation exercised its call privilege and retired the bonds for $415,000. The corporation uses the straight-line method both to determine interest expense and to amortize debt issue costs.
Required: |
1. to 4. | Prepare the necessary journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) |
1.Record the issuance of the bond/June 30,2016
2.Record the payment of interest/Dec 31,2016
3.Record the amortization of debt issue cost/Dec 31,2016
4.Record the payment of interest/June 30,2017
5.Record the amortization of debt issue cost/June30,2017
6.Record the call of the bond/July1,2017
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