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Provide the year-end journal entries regarding the bond

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Question - On May 1, 2020, BC Industries Ltd. issued $ 2,000,000, 8% bonds. The bonds pay interest semi-annually on November 1 and May 1 with maturity date of May 1, 2028. BC uses the effective-interest method of amortizing bond discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%.

Instructions -

a) Round all dollar amount to the nearest dollar.

b) Calculate the total present value of the bond and the amount of discount or premium. Show all calculations.

c) Present the discount or premium amortization table, with proper headings, from May 1, 2020 to May 1, 2022.

d) Assuming the fiscal year-end of BC is December 31, provide the year-end journal entries regarding the bond for the year ended December 31, 2020.

Reference no: EM132565531

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