Question
E12-18 (Entries for Bond Transactions -- Effective Interest) Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2009, at 102. Interest is
E12-18 (Entries for Bond Transactions -- Effective Interest) Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2009, at 102. Interest is payable semianually on July 1 and January 1. Dion Company uses the effective interest method of amortization for bond premium or discount. Assume an efective yield of 9.75%.
INSTRUCTIONS
Prepare the journal entries to record the following. (Round to the nearest dollar)
a) the issuance of the bonds
b) the paymen of interest and related amorization on July 1, 2009
c) The accrual of interest and the relted ammoritzation on December 31, 2009.
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