Question
Exercise 14-6 Bonds; issuance; effective interest [LO14-2] The Gorman Group issued $970,000 of 13% bonds on June 30, 2013, for $1,042,973. The bonds were dated
Exercise 14-6 Bonds; issuance; effective interest [LO14-2]
| The Gorman Group issued $970,000 of 13% bonds on June 30, 2013, for $1,042,973. The bonds were dated on June 30 and mature on June 30, 2033 (20 years). The market yield for bonds of similar risk and maturity is 12%. Interest is paid semiannually on December 31 and June 30. |
| Required: |
| Complete the below table to record the company's journal entry. (Enter interest rate to 1 decimal place.) |
| 1. | Prepare the journal entry to record their issuance by The Gorman Group on June 30, 2013. (If no entry is required for a transaction, select "No journal entry required" in the first account field.) |
| 2. | Prepare the journal entry to record interest on December 31, 2013 (at the effective rate). (If no entry is required for a transaction, select "No journal entry required" in the first account field.) |
| 3. | Prepare the journal entry to record interest on June 30, 2014 (at the effective rate). (If no entry is required for a transaction, select "No journal entry required" in the first account field.) |
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