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Amortize bond discount and accrue interest

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The following information is taken from Marigold Corp.'s balance sheet as of December 31, 2016 Current liabilities Interest payable $89,500 Long term liabilities Bonds payable (5%, due January 1, 2027) $3,480,000 Less discount on bonds payable 34,800 $3,445,200 Interest is payable annually on January 1. The bonds are callable on any in your interest date. Marigold uses straight line amortization for any bond premium or discount. From December 31, 2016, the bond will be outstanding for an additional 10 years 120 months.

A. Journalize the payment of bond interest on January 1, 2017

B. Prepare the entry to Amortize bond discount in to accrued interest on December 31, 2017

C. Assume on January 1, 2018, after paying interest the Marigold Corp sales bonds having a base value of $580,000. The call price is 102 record the redemption of the bond.

D. Prepare the adjusting entry on December 31, 2018 two Amortize bond discount and accrue interest on the remaining balance

Reference no: EM131762973

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