Bannchi Corporation issued bonds twice during (20 times 1). The transactions were as follows: (20 times 1)
Question:
Bannchi Corporation issued bonds twice during \(20 \times 1\). The transactions were as follows:
\(20 \times 1\)
Jan. 1 Issued \(2,000,000\) of \(91 / 5\) per cent, ten-year bonds dated January 1, 20x1, with interest payable on June 30 and December 31. The bonds were sold at 98.1 , resulting in an effective interest rate of 9.5 per cent.
Apr. 1 Issued \(4,000,000\) of \(94 / 5\) per cent, ten-year bonds dated April 1, 20x1, with interest payable on March 31 and September 30. The bonds were sold at 102, resulting in an effective interest rate of 9.5 per cent.
June 30 Paid semiannual interest on the January 1 issue and amortised the discount, using the effective interest method.
Sept. 30 Paid semiannual interest on the April 1 issue and amortised the premium, using the effective interest method.
Dec. 31 Paid semiannual interest on the January 1 issue and amortised the discount, using the effective interest method.
31 Made an end-of-year adjusting entry to accrue interest on the April 1 issue and to amortise half the premium applicable to the interest period.
\(20 \times 2\)
Mar. 31 Paid semiannual interest on the April 1 issue and amortised the premium applicable to the second half of the interest period.
REQUYRED Prepare general journal entries to record the bond transactions. (Round amounts to the nearest whole number.)
Step by Step Answer:
Financial Accounting A Global Approach
ISBN: 9780395839867
1st Edition
Authors: Sidney J. Gray, Belverd E. Needles