a.
Concept Introduction:
Bond: Bond refers to a debt instrument or debt security that has a longer period for maturity with some component of interest or return to be received on the amount paid on a bond.
The issue price of the bond and the discount or premium on the bond.
b.
Concept Introduction:
Amortization: Amortization refers to the method of accounting which lower the booking amount or book value of any loan or any intangible asset over the time period.
To prepare: The amortization table for the bond issue using the effective rate of interest.
c.
Concept Introduction:
Journalizing: In accounts, for keeping records of all the business transactions properly, journalizing is being done for the transactions. Thus, it helps to track the transactions in chronological order as well as to maintain the records too.
To prepare: The journal for recording necessary entries for the bonds for the first year.
d.
Concept Introduction:
Journalizing: In accounts, for keeping records of all the business transactions properly, journalizing is being done for the transactions. Thus, it helps to track the transactions in chronological order as well as to maintain the records too.
To prepare: The journal for recording interest accrual and amortization cost for the third year.
e.
Concept Introduction:
Journalizing:
In accounts, for keeping records of all the business transactions properly, journalizing is being done for the transactions. Thus, it helps to track the transactions in chronological order as well as to maintain the records too.
To prepare: The journal for recording payment of the bonds at maturity.

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Chapter 14 Solutions
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