Question
Please help Question 19 Richmond Corporation issued $3,000,000 of 10% debenture bonds on January 1 of the current year to yield 9%, receiving $3,134,580. Interest
Please help
Question 19 Richmond Corporation issued $3,000,000 of 10% debenture bonds on January 1 of the current year to yield 9%, receiving $3,134,580. Interest is payable on December 31 each year and the bonds mature in 6 years. Richmond uses the effective interest method.
(a) What is the interest expense for the first year?
(b) Prepare the journal entry at the end of the first year.
(c) What is the interest expense for the second year?
(d) Now assume that the above bonds were dated and sold for $3,134,580 on May 1, 2019, with interest payable annually on April 30.
Compute the interest expense recorded on this bond during the fiscal year ending December 31, 2020.
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