Intermediate Accounting I

On January 1, 2019, Kesher Company issued $500,000 of 8%, 10 year bonds, at an effective interest rate of 6%. Interest payment dates are June 30th and December 31st of each year. Kesher uses the effective interest method. On March 31, 2020, Kesher re-purchased the outstanding bonds at 107 plus accrued interest.

INSTRUCTIONS

Prepare the necessary journal entries at 1/1/19, 6/30/19, 12/31/19 and 3/31/20. Show all backup computations. (Time value of money tables are on the last page of the exam.)

On January 1, 2019, Kesher Company issued $500,000 of 8%, 10 year bonds, at an effective interest rate of 6%. Interest payment dates are June 30th and December 31st of each year. Kesher uses the effective interest method. On March 31, 2020, Kesher re-purchased the outstanding bonds at 107 plus accrued interest. INSTRUCTIONS Prepare the necessary journal entries at 1/1/19, 6/30/19, 12/31/19 and 3/31/20. Show all backup computations. (Time value of money tables are on the last page of the exam.)