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What are the carrying value of the liabilities

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Question - On February 28, 2021, Universal Industries issued 10% bonds, dated January 1, with a face amount of $48 million. The bonds were priced at $42 million (plus accrued interest) to yield 12%. Interest is paid semiannually on June 30 and December 31. Universal uses the effective interest method and its fiscal year ends on October 31.

Required -

Prepare the journal entry to record the bonds issuance on February 28, 2021.

Prepare the journal entry to record the first interest payment on June 30, 2021.

What are the carrying value of the liabilities related to these bonds that will show on Universal's balance sheet on October 31, 2021.

Reference no: EM132814519

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