Question
On January 1, 2020, PIER Company acquires $500,000 of ABCs Companys 10-year, 10% bonds at a price of $535,090 when the market rate is 9%.
On January 1, 2020, PIER Company acquires $500,000 of ABCs Companys 10-year, 10% bonds at a price of $535,090 when the market rate is 9%. Interest is payable each December 31. The bonds are classified as held-to-maturity.
- Prepare the entry to record the purchase of the ABC bonds.
- Prepare an amortization schedule for the bonds for the first 2 years (2020 and 2021)
- Prepare the journal entry for the receipt of the interest and amortization on 12/31/20.
- On 1/1/22, the bonds are sold for $540,000. Prepare the necessary journal entry.
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
9th Edition
978-0470317549, 9780470387085, 047031754X, 470387084, 978-0470533475
