Question
Prepare all necessary journal entries for the following dates related to the bonds of Quick Seal Company. April 1, 2016: Quick Seal issued $2,000,000, 9%
Prepare all necessary journal entries for the following dates related to the bonds of Quick Seal Company.
April 1, 2016: Quick Seal issued $2,000,000, 9% bonds at 103 . Interest is payable semi- annually on April 1, and October 1. The bonds are dated to mature on April 1, 2026.
October 1, 2016: Quick Seal paid interest on the bonds and also amortized the premium using straight-line amortization.
December 31, 2016: Prepare any necessary adjusting entries. Note: Quick Seal's year end is December 31st. Hint: don't forget to prorate based on the amount of time that has passed since the last interest payment and premium amortization on October 1st.
April 1, 2017 Quick Seal paid all interest due, amortized the premium, and because of sudden changes in financial market conditions, they immediately retired the entire $2,000,000 of bonds at 104.
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