Bonds Sold between Interest Dates at a Discount, Bond Issue Proceeds, Retirement. Summa Manufactur- ing Company issued $900,000 par value, 5%, five-year bonds dated January 1, 2016. The bonds pay interest semiannually each June 30 and December 31. Summa issued the bonds on April 30, 2016, when the market rate of interest was 6%. Bond issue costs were $59,000. a. Determine the bond issue price including accrued interest on April 30, 2016. b. Prepare an amortization table for the bond issue using the effective interest rate method. c. Prepare the journal entries required on the date of issue and on the first two interest dates in 2016: June 30 and December 31. d. The bonds are retired on June 30, 2018, for $891,000. Prepare the journal entry at retirement.
Bonds Sold between Interest Dates at a Discount, Bond Issue Proceeds, Retirement. Summa Manufactur- ing Company issued $900,000 par value, 5%, five-year bonds dated January 1, 2016. The bonds pay interest semiannually each June 30 and December 31. Summa issued the bonds on April 30, 2016, when the market rate of interest was 6%. Bond issue costs were $59,000. a. Determine the bond issue price including accrued interest on April 30, 2016. b. Prepare an amortization table for the bond issue using the effective interest rate method. c. Prepare the journal entries required on the date of issue and on the first two interest dates in 2016: June 30 and December 31. d. The bonds are retired on June 30, 2018, for $891,000. Prepare the journal entry at retirement.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:2018) for $1,265,000.
P14-4. Bonds Sold between Interest Dates at a Discount, Bond Issue Proceeds, Retirement. Summa Manufactur-
Foing Company issued $900,000 par value, 5%, five-year bonds dated January 1, 2016. The bonds pay interest
semiannually each June 30 and December 31. Summa issued the bonds on April 30, 2016, when the market
rate of interest was 6%. Bond issue costs were $59,000.
466
fent of the bonds at the end of the third year (December
Mauch
a. Determine the bond issue price including accrued interest on April 30, 2016.
b. Prepare an amortization table for the bond issue using the effective interest rate method.
c.
nola
Prepare the journal entries required on the date of issue and on the first two interest dates in 2016: June 30
and December 31.
d. The bonds are retired on June 30, 2018, for $891,000. Prepare the journal entry at retirement.
mu
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