Reference no: EM133053851
Question - Prepare all the journal entries for the year 2021, to record the transactions relating to Kirby Inc.'s long-term bonds (Show all supporting computations.)
(a) On June 1, 2021, Kirby, Inc. issued $8,000,000, 6% callable bonds with a present value of $ 7,354,640 for $7,414,640 and a yield rate of 8%. Interest is payable semiannually on March 1 and September 1. The bonds mature on March 1, 2031. The bonds are callable at 101. Kirby uses the effective-interest method of amortization.
(b) On March 1, 2023, Kirby plans to purchase $5,000,000 of the bonds at the call price. Kirby would like to see what that journal entry would look like on that date.
(c) What interest rate should be used for calculating interest expense?
(d) Based on your answer in (c) above, why is important to the FASB for the use of this rate?
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Prepare all the journal entries for the year
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