The company closes its books on December 31: Lemon Co. sells $1,00,000 of 10% bonds on August 1, 2020. The bonds oay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022. For the case prepare all of the relevant journal entries from the time of sale until the date indicated. Use the effective-interest method for discount and premium amortization (construct amortization tables where applicable). Amortize premium or discount on interest dates and at year-end. (Assume that no reversing entries were made)
The company closes its books on December 31:
Lemon Co. sells $1,00,000 of 10% bonds on August 1, 2020. The bonds oay interest on February 1 and August 1. The due date of the bonds is August 1, 2023. The bonds yield 12%. On October 1, 2021, Lemon Co. buys back $200,000 worth of bonds for $218,000 (includes accrued interest). Give entries through February 1, 2022.
For the case prepare all of the relevant
Bonds
An obligation to pay the bearer the bond's face value plus the specified interest is outlined in a written contract or agreement between the issuer and the holder known as a bond. Most often, $500 or $1,000 bills or bonds are issued.
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