Amortization of a Bond Discount and Premium On September 1, 2018, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-end. The company’s fiscal year ends at December 31. Instructions Make the necessary adjusting entries at December 31, 2018, and the journal entry to record the payment of bond interest on March 1, 2019, under each of the following assumptions. The bonds were issued at 98. (Round to the nearest dollar.) The bonds were issued at 101. (Round to the nearest dollar.) 2. Compute the net bond liability at December 31, 2019, under assumptions 1and 2. (Round to the nearest dollar.) Modified instructions: make all the necessary journal entries for the accountable events. IMPORTANT: FOR THIS QUESTION I JUST NEED THE EXERCISE IN THE PICTURE TO BE COMPLETED. I DO NOT NEED THE OTHER PREVIOUS PARTS IF NOT NECESSARY FOR THAT. THANK YOU.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Amortization of a Bond Discount and Premium
On September 1, 2018, Evansville Lumber Company issued $80 million in 20-year, 10 percent bonds payable. Interest is payable semiannually on March 1 and September 1. Bond discounts and premiums are amortized at each interest payment date and at year-end. The company’s fiscal year ends at December 31.
Instructions
- Make the necessary
adjusting entries at December 31, 2018, and thejournal entry to record the payment of bond interest on March 1, 2019, under each of the following assumptions.- The bonds were issued at 98. (Round to the nearest dollar.)
- The bonds were issued at 101. (Round to the nearest dollar.)
2. Compute the net bond liability at December 31, 2019, under assumptions 1and 2. (Round to the nearest dollar.)
Modified instructions: make all the necessary journal entries for the accountable events.
IMPORTANT: FOR THIS QUESTION I JUST NEED THE EXERCISE IN THE PICTURE TO BE COMPLETED. I DO NOT NEED THE OTHER PREVIOUS PARTS IF NOT NECESSARY FOR THAT. THANK YOU.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
