Reference no: EM132867597
Question - On March, 2017 Franklin Corporation issued $15,000,000 of 10-year, 9% callable bonds. Interest is payable on March 1 and September 1. On the date the bonds were issued the market rate (effective interest rate) was 10 percent. Assume Franklin uses the effective interest method to amortized any premium or discount.
2017:
March 1- Issued $1,500,000 of 10-year 9% callable bonds. The market rate was 10%
September 1 -Paid interest and recorded amortization on the bonds.
December 31- Prepared the adjusting entry to record accrued interest and amortization of the discount.
2018:
January 1- Prepared the required reversing entry.
March 1 -Paid interest and recorded amortization on the bonds.
September 1 - Paid interest and recorded amortization on the bonds.
September 2 - Called the bonds at a price of 101.
Required -
1. Prepare the required general journal entries for each of the above dates using excel.
2. On a separate worksheet in the same workbook, prepare the bond amortization using the effective interest method.