Reference no: EM132834302
On January 1, 2017, Gummy Candy Co. sold 5%, 20-year bonds having a maturity value of $1,713,500 for $1,500,000, which provides bondholders with a 6% yield to maturity. The bonds are dated Jan 1, 2017. Interest is payable every July 1 and January 1.
Use the effective-interest method.
Instructions:
Problem A) Prepare the journal entries for Bond Issuance
Problem B) Prepare the schedule of interest expense and bond amortization for the 20 year life of the bond
Problem c) Prepare the journal entries to record the interest payment and amortization for 2020, 2022, 2028, 2031, and 2033.
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