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Prepare separate journal entries for issuance of the bonds

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Reference no: EM131774072

Question - Need three separate journal entries for the following below transactions.

Alpha had the following bond transactions during the fiscal year 2016:

On January 1: issued $10,000 of 6%, 5-year bonds at 102. Straight-line amortization method is used. Interest is payable semi-annual on July 1 and Jan 1.

On July 1: issued $500,000 of 10%, 10-year bonds at 88.5. Straight-line amortization method is used. Interest is payable semi-annual on July 1 and Jan 1.

On July 1: issued $10,000 of 8%, 10-year bonds for 510,853 cash. Straight-line amortization method is used. Interest is payable semi-annual on July 1 and Jan 1.

Requirements:

Prepare 3 separate Journal entries for the issuance of the 3 bonds on Jan 1 and July 1.

Prepare Journal entry for the payment of interest on July 1 for the bonds issued on Jan 1, assuming no prior accrual (note: should also include amortization of the premium).

Prepare separate Journal entries for the accrual of interests on December 31 for all 3 bonds (should also Include amortization of any premium or discount).

Reference no: EM131774072

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