Question
On September 1, 2015, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September
On September 1, 2015, Evansville Lumber Company issued $80 million in 20-year, 10 percent
bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and
premiums are amortized at each interest payment date and at year-end. The company's fiscal year
ends at December 31.
Instructions
A. Make the necessary adjusting entries at December 31, 2015, and the journal entry to record
the payment of bond interest on March 1, 2016, under each of the following assumptions that the bonds were issued at 98.
B. Prepare the necessary adjusting entries at December 31, 2015, and the journal entry to record the payment of bond interest on March 1, 2016, under the assumption that the bonds were issued at 101.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
A Assuming the bonds were issued at 98 1 Adjusting entry at December 31 2015 Interest Expense 160000...
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Step: 2
Step: 3
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Financial and Managerial Accounting the basis for business decisions
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
17th edition
007802577X, 978-0078025778
