On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,700,000 of 7-year, 10%...
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On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,700,000 of 7-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $8,282,857. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 Cash 8,282,857 0 Discount on Bonds Payable 417,143 0 Bonds Payable 0 8,700,000 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar. On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $8,700,000 of 7-year, 10% bonds at a market (effective) interest rate of 11%, receiving cash of $8,282,857. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July 1, 20Y1. 20Y1 July 1 Cash 8,282,857 0 Discount on Bonds Payable 417,143 0 Bonds Payable 0 8,700,000 Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the straight-line method. Round to the nearest dollar.
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Related Book For
Forensic And Investigative Accounting
ISBN: 9780808056300
10th Edition
Authors: G. Stevenson Smith D. Larry Crumbley, Edmund D. Fenton
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