Question
On January 1, 2016, Knorr Corporation issued $700,000 of 6%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The
On January 1, 2016, Knorr Corporation issued $700,000 of 6%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 7%. Bond issue costs associated with the bonds totaled $8,312.46.
Required:
| Prepare the journal entries to record the following: |
| January 1, 2016 | Sold the bonds at an effective rate of 7% |
| December 31, 2016 | First interest payment using the effective interest method |
| December 31, 2016 | Amortization of bond issue costs using the straight-line method |
| December 31, 2017 | Second interest payment using the effective interest method |
| December 31, 2017 | Amortization of bond issue costs using the straight-line method |
PAGE 2016
GENERAL JOURNAL
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PAGE 2017
GENERAL JOURNAL
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
