Question
On January 1, 2018, The Vermont Teddy Bear Company issued $600,000, 5%, four-year bonds payable and received $621,983 in cash proceeds. The market rate at
On January 1, 2018, The Vermont Teddy Bear Company issued $600,000, 5%, four-year bonds payable and received $621,983 in cash proceeds. The market rate at the date of issue is 4%. Interest is payable semiannually each June 30 and December 31. Winnie Company uses the effective interest method of amortization.
Please round all calculations to the nearest dollar!
A. Prepare the journal entry to record the issuance of the bonds on January 1, 2018
B. Prepare the journal entry to record the first interest payment and interest expense on June 30, 2018. No entries have yet been made for interest on these bonds.
C. Prepare the journal entry to record the second interest payment and interest expense on December 31, 2018. No entries have been made for these bonds since June 30, 2018.
D. What would the carrying value of the bonds be on December 31, 2018?
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Challenges In Advanced Management Accounting
Authors: The Open University
1st.0th Edition
B01D8X506Y
