Required a. Confirm the bond issue price. b. Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2016, and semiannual interest payment and discount amortization on December 31, 2016. Use the effective interest rate method. c. Post the journal entries from part b to their respective T-accounts. d. Trueman elected to report these bonds in its financial statements at fair value. On December 31, 2016, these bonds were listed in the bond market at a price of 101 (or 101% of par value). What entry is required to adjust the reported value of these bonds to fair value? e. Prepare a table summarizing the effect of these bonds on earnings for 2016.

Required a. Confirm the bond issue price. b. Prepare journal entries to record the bond issuance, semiannual interest payment and discount amortization on June 30, 2016, and semiannual interest payment and discount amortization on December 31, 2016. Use the effective interest rate method. c. Post the journal entries from part b to their respective T-accounts. d. Trueman elected to report these bonds in its financial statements at fair value. On December 31, 2016, these bonds were listed in the bond market at a price of 101 (or 101% of par value). What entry is required to adjust the reported value of these bonds to fair value? e. Prepare a table summarizing the effect of these bonds on earnings for 2016.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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