Question
Scenario 1 On January 1, 2018, Harvey Inc. issued $1,000,000 of 10 years, 6% bonds when the market rate was 10%. The bonds pay semi-annual
Scenario 1
On January 1, 2018, Harvey Inc. issued $1,000,000 of 10 years, 6% bonds when the market rate was 10%. The bonds pay semi-annual interest on July 1 and December 31.
Required
- What is the entry to record the issuance of the bond on January 1, 2018?
- What is the entry to record the first interest payment on July 1, 2018?
- What is the carrying amount of the bond on January 1, 2022?
Scenario 2
On January 1, 2020, Harvey Inc. made available $100,000 of 20 years, 10% bonds at par value. The bonds pay quaterly interest on April 1, July 1, October 1 and December 31. The bonds were purchased on June 1, 2020, by an investor.
Required
- What is the entry to record the issuance of the bond on January 1, 2020?
- What is the entry to record the purchase of the bond on June 1, 2020?
- What is the entry to record the first interest payment on July 1, 2020?
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Fia Foundations Of Financial Accounting Ffa Interactive Text
Authors: BPP Learning Media
1st Edition
1509724176, 978-1509724178
