A coley co issued 220 million face amount of 9 10-year, Ask an Expert

Accounting

a. Coley Co. issued $2.20 million face amount of 9%, 10-year bonds on June 1, 2013. The bonds pay interest on an annual basis on May 31 each year.

1. Independent of your answer to part (a), assume that the proceeds were $1,833,000. Use the horizontal model to show the effect of issuing the bonds. (Enter decreases to account balances with a minus sign.)

2. Independent of your answer to part (a), assume that the proceeds were $1,833,000. Record the journal entry to show the effect of issuing the bonds.

Record the issuance of bonds payable at a discount

b. Calculate the interest expense that Coley Co. will show with respect to these bonds in its income statement for the fiscal year ended September 30, 2013, assuming that the discount of $367,000 is amortized on a straight-line basis. (Round your answers to whole dollars.)

Accured Interest Payable =

Discount Amortization =

Interest Expense for 4 Months =

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91524324

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