Duval Co. issues four-year bonds with a $119,000 par value onJune 1, 2015, at a price of $114,840. The annual contract rate is5%, and interest is paid semiannually on November 30 and May 31.Prepare an amortization table for these bonds. Use thestraight-line method of interest amortization. Prepare journalentries to record the first interest payment, accrued interest asof December 31, 2015 and to record the second interest payment.Assume no reversing entries have been prepared.Record the firstinterest payment on November 30, 2015. Record the year-end accrualof interest.Record the second interest payment on December 31,2016.
Duval Co. issues four-year bonds with a $119,000 par value onJune 1, 2015, at a price of $114,840. The annual contract rate is5%, and interest is paid semiannually on November 30 and May 31.Prepare an amortization table for these bonds. Use thestraight-line method of interest amortization. Prepare journalentries to record the first interest payment, accrued interest asof December 31, 2015 and to record the second interest payment.Assume no reversing entries have been prepared.Record the firstinterest payment on November 30, 2015. Record the year-end accrualof interest.Record the second interest payment on December 31,2016.
Related questions
Szmanda Company issues 13%, five-year bonds, on December 31, 2015, with a par value of $210,000 and semiannual interest payments.
| Semiannual Period-End | Unamortized Discount | Carrying Value | ||||||
| (0) | 12/31/2015 | $ | 7,200 | $ | 202,800 | |||
| (1) | 6/30/2016 | 6,480 | 204,240 | |||||
| (2) | 12/31/2016 | 5,760 | 204,240 | |||||
Use the above bond amortization table and prepare journal entries to record
(a) the issuance of bonds on December 31, 2015;
(b) the first interest payment on June 30, 2016; and
(c) the second interest payment on December 31, 2016.
