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Make a journal entry to record the amortization of discount

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Reference no: EM132592213

On July 1, 2009 PT Kencana Sakti purchased 100 18% of PT Maju Jaya bonds, with a nominal value of Rp. 100,000 per sheet. For this investment, PT Kencana Sakti paid cash Rp. 9,925,000, - not including current interest. The bonds were issued by PT. Maju Jaya on March 1, 2009 and will be due on September 1, 2013. Interest is received semi-annually, which is every March 1 and September 1. Due to the need for fresh funds in the form of cash PT. Kencana Sakti sold back 50 investment bonds of PT Maju Jaya bonds on December 1, 2012. In the resale of these bonds, PT. Kencana Sakti received cash of Rp. 3,250,000, - not including current interest. The method used to amortize the bond discount / premium is the straight-line method and is recorded together with the interest payment date.

Requested:

Question a) Make a journal entry to record the purchase of current bonds and interest on July 1, 2009

Question b) Make a journal entry to record the interest received and amortization of discount / premium bonds during 2009 and 2010

Question c) Make journal entries when selling investment bonds

Question d) Make a journal entry when the bond is due

Reference no: EM132592213

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