Question
On June 30, 2017, Pina Company issued $3,100,000 face value of 13%, 20-year bonds at $3,333,211, a yield of 12%. Pina uses the effective-interest method
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On June 30, 2017, Pina Company issued $3,100,000 face value of 13%, 20-year bonds at $3,333,211, a yield of 12%. Pina uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Prepare the journal entries to record the following transactions.
| (1) | The issuance of the bonds on June 30, 2017. | |
| (2) | The payment of interest and the amortization of the premium on December 31, 2017. | |
| (3) | The payment of interest and the amortization of the premium on June 30, 2018. | |
| (4) | The payment of interest and the amortization of the premium on December 31, 2018. |
| Date | Accounts | DR | CR |
| 06/30/17 | |||
| 12/31/17 | |||
| 06/30/18 | |||
| 12/31/18 | |||
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Intermediate Accounting
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
10th Edition
324300980, 978-0324300987
