Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is payable semi annually on July 1 and January 1. Assume an effective yield of 9.7705% Prepare the journal entries to record the following: (a) The issuance of the bonds (b) The payment of interest and the related amortization on July 1, 2019 (c) The accrual of interest and the related amortization on December 31, 2019.
Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is payable semi annually on July 1 and January 1. Assume an effective yield of 9.7705% Prepare the journal entries to record the following: (a) The issuance of the bonds (b) The payment of interest and the related amortization on July 1, 2019 (c) The accrual of interest and the related amortization on December 31, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Foreman Corporation issued P800, 000 of 10% 20 year bonds on January 1, 2019, at P102. Interest is payable semi annually on July 1 and January 1. Assume an effective yield of 9.7705%
Prepare the
(a) The issuance of the bonds
(b) The payment of interest and the related amortization on July 1, 2019
(c) The accrual of interest and the related amortization on December 31, 2019.
Expert Solution
Step 1
Journal entry: Journal entry is a set of economic events which can be measured in monetary terms. These are recorded chronologically and systematically.
Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions:
- Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
- Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education