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A company issued $6,000,000 of 8% debentures on May 1, 2006 andreceived cash totaling $5,323,577. The bonds pay interestsemiannually on May 1 and November 1. The maturity date on thesebonds is November 1, 2014. The firm uses the effective-interestmethod of amortizing discounts and premiums. The bonds were sold toyield an effective-interest rate of 10%.

Prepare the 12/31/07 adjusting journal entry to record the accruedbond interest from November 1, 2007 to December 31, 2007.

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Jarrod Robel
Jarrod RobelLv2
28 Sep 2019

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On January 1, 2014, Oaken Furniture Co. issued $700,000 of 10%bonds and received cash totaling $795,141. Interest is payablesemiannually on January 1 and July 1. The maturity date on thesebonds is January 1, 2024. The firm uses the effective –interestmethod of amortizing discounts and premiums. The bonds were sold toyield an effective interest rate of 8%. Oaken Furniture Co. is acalendar-year corporation. 1) Prepare an amortization table throughthe first two periods (7/1/14 & 1/1/15) using the effectiveinterest method. 2) Prepare the journal entries to record bondrelated transacations as of the following dates: a) January 1, 2014b) July 1, 2014 c) December 31,2014

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