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Prepare journal entry to record bond interest payment

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Reference no: EM131591223

Question:

Assign Bond Amort Tbl Issue JE Int pmt Xerox 2M

Xerox Company Issues  $2,000,000 9% 2 yr bonds at 97

Interest is payable on July 1st and January 1st, 2014. Straight-line method is used for amorization.

Prepare the bond amortization schedule.

JE1: Prepare journal entry for sale of the bonds January 1, year1. Include explanation with all information required for someone to verify your amortization table.

JE2: Prepare journal entry to record bond interest payment on July 1st.

JE3: Prepare journal entry accrual of interest expense December 31st

JE4: Prepare journal entry to pay interest January 2, year2

JE #5: Redeem Bonds @ 101 on Jan 1st year #2 assuming Bond Interest payment has been made. This is a test of your total understanding of using the bond amortization table and basic accounting principles. 'Critical thinking' is required. Explanation should contain all data needed for someone else who has the amortization table to verify the JE.

Video Demonstration & explanation:

https://youtu.be/kdRpD02LJJw

Video does not demonstrate the early redemption of the bond. See page 652 for illustration.

Reference no: EM131591223

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