Caruba company issued 300000 6 20-year bonds on january 1, Ask an Expert

Accounting

Caruba Company issued $300,000, 6%, 20-year bonds on January 1, 2012, at 103. Interest is payable semiannually on July 1 and January 1. Caruba uses straight-line amortization for bond premium or discount.

Prepare the journal entries to record the following.

(a)		The issuance of the bonds.
(b)		The payment of interest and the premium amortization on July 1, 2012, assuming that interest was not accrued on June 30.
(c)		The accrual of interest and the premium amortization on December 31, 2012.
(d)		The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9955291

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