n 1/1/20, $300,000 of 10 year, 8% bonds were issued for $262,616. The issue price was based on an effective interest rate of 10%. Interest payment dates are 6/30 and 12/31 of each year. On 1/1/21, the bonds were retired at 95. A: Journalize the issuance of the bonds on 1/1/20. B: Journalize the entries that should be made on 6/30/20 and 12/31/20 under the straight line amortization method. C: Journalize the entry that should be made on 6/30/20 under the effective interest method. (show calculations) D: Journalize the entry that should be made on 12/31/20 under the effective interest method. (show calculations)
On 1/1/20, $300,000 of 10 year, 8% bonds were issued for $262,616. The issue price was based on an effective interest rate of 10%. Interest payment dates are 6/30 and 12/31 of each year. On 1/1/21, the bonds were retired at 95.
A: Journalize the issuance of the bonds on 1/1/20.
B: Journalize the entries that should be made on 6/30/20 and 12/31/20 under the
C:
D: Journalize the entry that should be made on 12/31/20 under the effective interest method. (show calculations)
E: Journalize the retirement of the bonds on 1/1/21 (show calculations).
Assume use of the effective interest method.
Step by step
Solved in 3 steps
