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BONDS ISSUED AT A PREMIUM

Wang Corporation issued the following bonds ata premium:

Date of issue and sale: ...........March 1, 20-1

Principal amount: .................$250,000

Sale price of bonds: ...............103

Denomination of bonds: .........$500

Life of bonds: .....................20 years

Stated rate: ........................8%, payable semiannually on August

.......................................31and February 28

REQUIRED

1. Prepare journal entries for:

(a) Issuance of the bonds at a premium.

(b) Interest payment and premium amortization on the bonds on August 31,20-1.

(d) Reversing entry for the beginning of 20-2.

(e) Interest payments and premium amortization on the bonds for 20-2

(February 28 and August 31).

2. Calculate the carrying value of the bonds on August 31, 20-2.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91671495

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