On January 1, 2019, Western Manufacturing Corporation issued $3,000,000, 10%, 5-year bonds dated January 1, 2019, at 104. The bonds pay semi-annual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a December 31, year end. Instructions: Prepare the journal entries to record the following: The issuance of bonds on January 1, 2019 The payment of interest and the discount (or premium) amortization on July 1, 2019. The accrual of interest and the discount (or premium) amortization on December 31, 2019.
On January 1, 2019, Western Manufacturing Corporation issued $3,000,000, 10%, 5-year bonds dated January 1, 2019, at 104. The bonds pay semi-annual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a December 31, year end. Instructions: Prepare the journal entries to record the following: The issuance of bonds on January 1, 2019 The payment of interest and the discount (or premium) amortization on July 1, 2019. The accrual of interest and the discount (or premium) amortization on December 31, 2019.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2019, Western Manufacturing Corporation issued $3,000,000, 10%, 5-year bonds dated January 1, 2019, at 104. The bonds pay semi-annual interest on January 1 and July 1. The company uses the straight-line method of amortization and has a December 31, year end.
Instructions:
Prepare the
- The issuance of bonds on January 1, 2019
- The payment of interest and the discount (or premium) amortization on July 1, 2019.
- The accrual of interest and the discount (or premium) amortization on December 31, 2019.
- The payment of interest on January 1, 2020
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