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On Feb 1, 2009, Kirby, Inc. issued $600,000, 6% bonds at 86.4095. Market rate is 8%. Interest is payable semiannually on February 1 and August
On Feb 1, 2009, Kirby, Inc. issued $600,000, 6% bonds at 86.4095. Market rate is 8%. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2019. The bonds are callable at 102. On November 1, 2010, Kirby purchased $360,000 of the bonds at the call price plus accrued interest. Kirby uses the effective interest method for premium/discount amortization. Bond issue costs are amortized at year-end using straight-line amortization. a) Make all journal entries necessary through November 1, 2010. b) What amount of interest expense should be recorded on December 31, 2010? Provide the journal entry. c) What amount of interest expense should be recorded on February 1, 2011? Provide the journal entry
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