Question
On 1/1/2019, Al-Furat Company issued a bond for subscription worth 3,000,000 dinars at an interest rate of 8% annually, and for a period of 10
On 1/1/2019, Al-Furat Company issued a bond for subscription worth 3,000,000 dinars at an interest rate of 8% annually, and for a period of 10 years (that is, the bond is returned after this period), while the market interest rate on the date of issuance was 11%. The interest is payable on a semi-annual basis on 1/7 and 1/1 of each year. The company also uses the real interest method to amortize the issue difference. Required: Prepare journal entries to record each of the following: (a) Issuance of bonds. (B) Payment of interest and related amortization on 7/1/2019. (C) The accrual of interest and related amortization on December 31, 2019.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started