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Journalize the entry to record the amount of cash proceeds

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Reference no: EM132543744

On July 1, year 1, Ware Co. Issued $25,000,000 of ten year, 10%bonds at a market (effective) interest rate of 9%, receiving cash of $26,625,925. Interest on the bonds is payable semiannually on Dec 31 and June 30.

Compute the following:

Question i. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.

Question ii. Journalize the entries to record the following:

a. The first semiannual interest payment on Dec 31, Yr. 1, and the amortization of the bond premium, using the interest method.

b. The interest payment on June 30, Year 2 (second interest payment) and the amortization of the bond discount, using the interest method.

c. Determine the total interest expense for Year 1.(first interest payment )

Note: Make a table of amortization of bond premium using interest method for 2 interest payments. And then do journal entries each period for by using the figures from the table.

Reference no: EM132543744

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