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Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1,
Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on December 31. (a) Set up a schedule of interest expense and discount amortization under the straight-line method. (Round answers to the nearest cent.) (10 pts) (b) Enter the journal entry on 1/1/2017 (5 pts) (c) Enter the journal entry on 12/31/2017(5 pts) Assume the same information as in the previous question. The effective-interest rate is 12%. (a) Set up a schedule of interest expense and discount amortization under the effective-interest method. (10pts) (b) Enter the journal entry on 1/1/2017 (3 pts) (c) Enter the journal entry on 12/31/2017 (3 pts) (d) On 1/1/2019, the firm calls the entire issue at 101% of par value and cancels it. Enter the journal entry for this transaction. (4 pts)
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