Amity Construction Company issued $100,000 of 10% bonds on January 1, 2003. The maturity date of the
Question:
Amity Construction Company issued $100,000 of 10% bonds on January 1, 2003. The maturity date of the bonds is January 1, 2013. Interest is payable January 1 and July 1. The bonds were sold at 111.4 on July 1, 2003. The company uses the straight-line method of amortizing bond premiums and discounts. 1. Make the required journal entries for each of the following dates:
a. July 1, 2003.
b. December 31, 2003.
c. January 1, 2004.
d. July 1, 2004. 2. Because of a substantial decline in the market rate of interest, Amity Construction Company purchased all the bonds on the open market at face value (100) on July 1, 2006. The following entry had just been made on that day:
Step by Step Answer:
Financial Accounting
ISBN: 9780324066708
8th Edition
Authors: W. Steven Albrecht, James D. Stice, Earl Kay Stice, K. Fred Skousen, Albrecht S.E.