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Strathern Corporation issued ten-year term bonds dated January 1, 2009, with a face value of exist800,000. The face interest rate is 10 percent, and interest
Strathern Corporation issued ten-year term bonds dated January 1, 2009, with a face value of exist800,000. The face interest rate is 10 percent, and interest is payable semi-annually on June 30 and December 31. The bonds were issued for exist708, 400 to yield an effective annual rate of 12 percent. Use the effective interest method of amortization. Round answers to the nearest dollar. a. Prepare entries in journal form without explanations to record the bond issue on January 1, 2009, and the payments of interest and amortization on June 30 and December 31, 2009. If an amount box does not require an entry, leave it blank. b. Calculate the total amount to be reported as Bond Interest Expense on the income statement for the year ended 2010. exist c. Calculate the carrying value of the bonds on December 31, 2010
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