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Rockwood Company issued $100,000 of 10% bonds on November 1, 2016, at 103. Interest on the bonds is payable on November 1 and May 1
Rockwood Company issued $100,000 of 10% bonds on November 1, 2016, at 103. Interest on the bonds is payable on November 1 and May 1 of each year, and the maturity date is November 1, 2026. Rockwood retired bonds with a face value of $20,000 on February 1, 2018, at 98 plus accrued interest. Rockwood uses straight-line amortization and reverses any calendar year-end adjusting entries.
Required:
1. | Prepare the journal entry to record the issuance of the bonds on November 1, 2016. |
2. | Prepare all the journal entries to record the interest expense during 2017. |
3. | Prepare the journal entries to record the retirement of $20,000 of the bonds on February 1, 2018. |
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