On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds to yield a market interest rate of 5%, which resulted in a discount price of 95.62. Interest is paid semi-annually on January 1 and July 1. (Currency in Danish kroner, kr.) Instructions: A. Work out a complete amortization schedule on the bonds. B. Prepare the journal entries to record the following: (a) The issuance of the bonds on January 1, 2015 (b) The payment of interest and amortization on July 1, 2015 (c) The final entry that would be made after the last payment of interest when the bonds mature on January 1, 2020
On January 1, 2015, Jørgensen Inc. in Copenhagen, Denmark, issued kr. 800,000 of five-year, 4% bonds to yield a market interest rate of 5%, which resulted in a discount price of 95.62. Interest is paid semi-annually on January 1 and July 1. (Currency in Danish kroner, kr.)
Instructions:
A. Work out a complete amortization schedule on the bonds.
B. Prepare the
(a) The issuance of the bonds on January 1, 2015
(b) The payment of interest and amortization on July 1, 2015
(c) The final entry that would be made after the last payment of interest when the bonds mature on January 1, 2020
* Round all amounts to the nearest Danish kroner (i.e., do not leave any decimals).
Step by step
Solved in 3 steps with 3 images
