Question
Massy Company issued $4,000,000 of 10-year, 11% bonds on January 4, 2021. The bonds pay interest semiannually on June 30 and December 31. The current
Massy Company issued $4,000,000 of 10-year, 11% bonds on January 4, 2021. The bonds pay interest semiannually on June 30 and December 31. The current market rate of interest is 10%. Required: (i) Calculate the selling price of the bond. (ii) Prepare the journal entries for the issuance of the bonds. (iii) Prepare the journal entries for the amortization on the Premium/Discount on the bonds. (iv) Prepare the journals for interest payment on the amortization of the premium or discount. (v) PrMassy Company issued $4,000,000 of 10-year, 11% bonds on January 4, 2021. The bonds pay interest semiannually on June 30 and December 31. The current market rate of interest is 10%.
Required:
(i) Calculate the selling price of the bond.
(ii) Prepare the journal entries for the issuance of the bonds.
(iii) Prepare the journal entries for the amortization on the Premium/Discount on the bonds.
(iv) Prepare the journals for interest payment on the amortization of the premium or discount.
(v) Prepare the journal entries if the bonds are redeemed at maturity.epare the journal entries if the bonds are redeemed at maturity.
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, and Terry D. Warfield
15th edition
978-1118159644, 9781118562185, 1118159640, 1118147294, 978-1118147290
