Bond discount entries for bonds payable transactionson july

Assignment Help Financial Accounting

Reference no: EM13356184

Bond discount entries for bonds payable transactions.

On July 1, 2010, Brower Industries Inc. issued $32,000,000 of 10-year, 12% bonds at an effective interest rate of 13% receiving cash of $30,237,139. Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.

Instructions
1.Journalize the entry to record the amount of cash proceeds from the sale of the bonds.

2.Journalize the entries to record the following::
a.The first semiannual interest payment on December 31, 2010, and the amortization of the bond discount, using the straight-line method. (Round to the nearest dollar)
b.The interest payment on June 30, 2011, and the amortization of the bond discount using the straight-line method. (Round to the nearest dollar)

3.Determine the total interest expense for 2010.

4.Will the bond proceeds always be less that the face amount of the bonds when the contract rate is less that market rate of interest?

Reference no: EM13356184

Questions Cloud

Calculation of current assets total assets amp net : calculation of current assets total assets amp net income.calculate 1 current assets 2 total assets 3 net income based

Objective questions relating to basic accounting equation : objective questions relating to basic accounting equation amp concepts.1.the debt created by a business when it makes a

Objective questions relating to basic accounting equation : objective questions relating to basic accounting equation amp concepts.1. primary users of accounting information are

Stock investment transactions equity method and available : stock investment transactions equity method and available for sale securitiesroman products inc. is a wholesaler of

Bond discount entries for bonds payable transactionson july : bond discount entries for bonds payable transactions.on july 1 2010 brower industries inc. issued 32000000 of 10-year

Calculation of net income amp retained : calculation of net income amp retained earnings.calculate1net income2retained earnings based on the information below.

Calculation of salary payable net taxescalculate and show : calculation of salary payable net taxes.calculate and show all work for1 gross pay2 net pay for employee 12s weekly pay

Descriptive questions - discount on bills payable1 if an : descriptive questions - discount on bills payable.1. if an organization purchases 700 of supplies on account with terms

Descriptive questions-basic accounting principle1 advance : descriptive questions-basic accounting principle.1. advance payments from customers for future services are recorded as

User Account

All Pages