Question
On January 1, 2020, Wood Manufacturing issued 600 bonds, each with a face value of $1,000, a coupon rate of 3% paid annually on December
On January 1, 2020, Wood Manufacturing issued 600 bonds, each with a face value of $1,000, a coupon rate of 3% paid annually on December 31, and a maturity date of December 31, 2022. On the issue date, the market rate was 4%, so the total proceeds from the bond issue were $583,352. Wood uses the effective-interest method. Required: a. Prepare a 3-column bond amortization table. b. Give the journal entry to record the bond issue. c. Give the journal entries to record the interest payments on December 31, 2020, and 2021. d. Assume the bonds are retired on January 1, 2022, at a price of 101. Give the journal entry to record the bond retirement.
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