Can I have help with this as soon as possible? Thank you.
Rayco Corporation had the following bond transactions during the fiscal year 2016:
A- On January 1: issued ten $1,000 bonds at 102. The 5-year bonds is dated January 1, 2016. The contract interest rate is 6%. Straight-line amortization method is used. Interest is payable semi-annual on January 1 and July 1.
B- On July 1: Rayco Corporation issued $500,000 of 10%, 10-year bonds. The bonds dated January 1, 2016 were issued at 88.5, and pay interest on July 1 and January 1. Effective interest rate for these bonds is 12%. Straight-line amortization method is used.
C- On October 1: issued 10-year bonds $10,000 face value bonds, for $10,853 cash. The bonds have a stated rate of 9%, but an effective rate of 6%. Straight-line amortization method is used. Interest is payable on October 1 and April 1.
Requirements: Prepare all general journal entries for the three bonds issued and any interest accruals and payments for the fiscal year 2016. (Round all calculations to nearest whole dollar.)
The format must look like the chart below. Also, this is what I have worked so far but I'm unsure if I'm correct.
|
Date
|
Account
|
Debit
|
Credit
|
|
Jan 1
|
Cash
|
102,000
|
|
| |
Bond Payable
|
|
100,000
|
| |
Premium on Bond Payable
|
|
2,000
|
| |
|
|
|
|
July 1
|
Interest Expense
|
3,000
|
|
| |
Interest Payable
|
|
3,000
|
| |
|
|
|
|
July 1
|
Interest Payable
|
3,000
|
|
| |
Cash
|
|
3,000
|
| |
|
|
|
|
Dec 31
|
Interest Expense
|
2,600
|
|
| |
Amortization of Premium
|
400
|
|
| |
Interest Payable
|
|
3,000
|