Question
On January 1, 2016, Colt issued a $2,000,000, 9% bond. Interest is payable semi-annual on January 1 and July 1 and the bonds mature on
On January 1, 2016, Colt issued a $2,000,000, 9% bond. Interest is payable semi-annual on January 1 and July 1 and the bonds mature on January 1, 2026. Investors require an effective interest rate of 12%.
a) Prepare the entry to record the issuance of bonds.
b) Prepare the entry to record the July 1, 2016 interest payment using the effective-interest method.
c) What is the carrying value of the bond immediately after the July 1, 2016 interest payment?
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Managerial Accounting
Authors: Carl S. Warren, James M. Reeve, Jonathan E. Duchac
10th Edition
B010IKDQZM
