Walker Incorporated sold $500,000 of 10% bonds on January 1, 2020 for a price that yields a 12% interest rate. The bonds pay interest semi-annually on June 30 and December 31. The bonds are due December 31, 2024. Walker uses the effective interest method. Instructions: 1. Determine the selling price of the bonds on January 1, 2020. 2. Prepare an amortization schedule using the effective interest method. 3. Prepare the journal entries for 2020.
Walker Incorporated sold $500,000 of 10% bonds on January 1, 2020 for a price that yields a
12% interest rate. The bonds pay interest semi-annually on June 30 and December 31. The
bonds are due December 31, 2024. Walker uses the effective interest method.
Instructions:
1. Determine the selling price of the bonds on January 1, 2020.
2. Prepare an amortization schedule using the effective interest method.
3. Prepare the
4. Assume the company reacquired the bonds on July 1, 2023, at 104 and prepare journal entry
to record the retirement of the bonds.
5. Assume Walker Incorporated used the straight-line method to amortize the premium or
discount. Prepare the journal for June 30, 2020 to record interest expense.
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