Solution-Prepare journal entries on the december and january

Prepare journal entries on the december and january

Reference no: EM133128014

Question - Master Corp. issued 5%, $240,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1 and January 1, and were issued to yield 6%. The bonds mature on January 1, 2030, and the company uses the effective interest method to amortize bond discounts or premiums.

Required -

a. Prepare journal entries on the following dates.

1. January 1, 2020-Issuance of bonds.

2. July 1, 2020-Interest payment.

3. December 31, 2020-Interest accrual.

4. January 1, 2021-Interest payment.

b. Answer part a, assuming instead that the company uses the straight-line interest method to amortize discounts and premiums and the bonds were sold on March 1, 2020, for $221,986 (excluding accrued interest).

Reference no: EM133128014

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Prepare journal entries on the december and january

Reference no: EM133128014

Reference no: EM133128014

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