Question
The City of Buffalo issued 300 bonds at their face value of $7,000 each plus accrued interest on June 1, 2020. The term of the
- The City of Buffalo issued 300 bonds at their face value of $7,000 each plus accrued interest on June 1, 2020. The term of the bonds was January 1, 2020, to January 1, 2026, with interest payable semi-annually each January 1 and July 1 at 7%. Buffalo uses the effective interest method.
- Prepare the companys journal entry for the date of issuance
| June 1, 2020 | Dr. Cash |
|
|
| Cr. Binds Payable |
|
|
| Cr. Interest Expense |
|
- Prepare the companys journal entry for the July 1 interest payment
| July 1, 2020 | Dr. Interest Expense |
|
|
| Cr. Cash |
|
- Prepare the companys December 31 adjusting entry
| Dec 31, 2020 | Dr. Interest Expense |
|
|
| Cr. Interest Payable |
|
please give the current formula.
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Auditing Cases An Active Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
2nd Edition
0130674842, 978-0130674845
