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Make a bond amortization schedule

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Question - In each of the following independent cases, the company closes its books on December 31.

1. Flounder Co. sells $467,000 of 10% bonds on March 1, 2020. The bonds pay interest on September 1 and March 1. The due date of the bonds is September 1, 2023. The bonds yield 12%. Give entries through December 31, 2021.

Required -

1. Make a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end.

2. Make all of the relevant journal entries from the time of sale until December 31, 2021. (As

2. Culver Co. sells $424,000 of 12% bonds on June 1, 2020. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1, 2024. The bonds yield 10%. On October 1, 2021, Culver buys back $131,440 worth of bonds for $138,440 (includes accrued interest). Give entries through December 1, 2022.

Required -

1. Make a bond amortization schedule using the effective-interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end.

2. Make all of the relevant journal entries from the time of sale until December 31, 2022.

Reference no: EM132640983

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