Question
Take me to the text On May 1, 2020, Hrd Corporation issued a 5-year bond worth $372,000 with an interest rate of 10% per
Take me to the text On May 1, 2020, Hrd Corporation issued a 5-year bond worth $372,000 with an interest rate of 10% per annum. Interest is to be paid semi-annually on October 31 and April 30. At the time of the issuance, the market interest rate was 8%. Hrd Corporation amortizes any premium or discount using the effective interest method. Calculate the bond issue price and the resulting premium or discount. Do not enter dollar signs or commas in the input boxes. Round your answers to the nearest whole number For transactions with more than one debit or credit, enter the accounts in alphabetical order. For bond calculations, use the PV tables in Chapter 7 of the textbook or use a financial calculator. Bond Issue Price: $ Premium or Discount: $ b) Prepare journal entries to record the following bonds payable transactions. 1) Issuance of bonds on May 1, 2020. Date Account Title and Explanation May 1 Cash Bonds Payable Premium on Bonds Payable + To record bond issuance Debit Credit 372000 2) Payment of interest and amortization of premium or discount on October 31, 2020. Account Title and Explanation Date Oct 31 Interest Expense Premium on Bonds Payable Cash To record first payment of interest and amortization Debit Credit 16087 2513 18600
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