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Give the journal entry to record the bond retirement

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Reference no: EM133079896

Question - On January 1, 2020, Surreal Manufacturing issued 600 bonds, each with a face value of $1,000, a stated interest rate of 6 percent paid semi-annually on December 31 and June 30, and a maturity date of December 31, 2022. On the issue date, the market interest rate was 8 percent. Surreal uses the effective-interest bond amortization method.

Required -

1. Prepare a bond amortization schedule.

2. Prepare the journal entry to record the bond issue.

3. Prepare the journal entries to record the interest payments on December 31, 2020, and 2021.

4. Prepare the journal entry to record the interest and face value payment on December 31, 2022.

5. Assume the bonds are retired on January 1, 2022, at a price of 101. Give the journal entry to record the bond retirement.

Reference no: EM133079896

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