Question
On January 1, 2019, Calvert Company issues 10%, $200,000 face value bonds for $207,259.79, a price to yield 8%. The bonds mature on December 31,
On January 1, 2019, Calvert Company issues 10%, $200,000 face value bonds for $207,259.79, a price to yield 8%. The bonds mature on December 31, 2020. Interest is paid semiannually on June 30 and December 31.
Required:
| 1. | Prepare a bond interest expense and premium amortization schedule using the straight-line method. |
| 2. | Prepare a bond interest expense and premium amortization schedule using the effective interest method. |
| 3. | Prepare the journal entries to record the interest payments on June 30, 2019, and December 31, 2019, using both methods. |
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Intermediate Accounting
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
18th Edition
1119790972, 9781119790976
