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Plentiful Incorporated issues bonds with total face value of $400,000 on December 31, 2015, receiving $400,000 in cash. The bonds requires annual coupon (interest)
Plentiful Incorporated issues bonds with total face value of $400,000 on December 31, 2015, receiving $400,000 in cash. The bonds requires annual coupon (interest) payments and have a 8% stated annual interest rate. The bonds mature on December 31, 2020. For the journal entries below, use the following abbreviations: CASH = cash, BONDS = bonds payable, INTEXP = interest expense, INTINC = interest income, INTPAY interest payable, INTREC = interest receivable. a. Prepare Plentiful's journal entry for December 31, 2015. Debit: Credit: b. Prepare Plentiful's quarterly adjusting journal entry for March 31, 2016. (HINT: First use the stated terms of the bond to compute the annual coupon payment. Then adjust for one quarter.) Debit: Credit: = c. Assuming Plentiful has made appropriate adjusting entries for June 30, September 30, and December 31, prepare Plentiful's journal entry for the 1st coupon payment on December 31, 2016. Debit: Credit: d. How much total interest expense will Plentiful record over the 5-year life of the bond? $
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