1 on january 1 200x rare bird ltd purchased 12 bonds dated, Ask an Expert

Accounting

1. On January 1, 200X Rare Bird Ltd. purchased 12% bonds dated January 1, 200X, with a face amount of $20 million. The bonds mature in 2022 . For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31.

Required:
1. Determine the price of the bonds at January 1, 200X.
2. Prepare the journal entry to record the bond purchase by Rare Bird on January 1, 200X.
3. Prepare the journal entry to record interest on June 30, 200X, using the effective interest method.
4. Prepare the journal entry to record interest on December 31, 200X, using the effective interest method.

2. In November sold $4,000 of gift cards. $700 of these were redeemed. In December sold $3,000 of gift cards, and redeemed $2,000 of November gift cards, and $400 of December gift cards. Prepare all journal entries appropriate to be recorded these transactions

3. Fowler Co.'s balance sheet showed the following at December 31. Common stock $10 par value = $100,000; Paid in capital - in excess of par = $50,000; Retained earnings = $20,000. A cash dividend of $1.00 per share is declared on December 31 and is payable the following January 20 to shareholders of record on January 10. Required: Prepare all appropriate journal entries.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9970766

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