May 1 2010 - bonds payable with a par value of 900000 which, Ask an Expert

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May 1, 2010 - Bonds payable with a par value of $900,000, which are dated January 1, 2010, are sold at 106 plus accrued interest. They are coupon bonds, bear interest ar 12% (payable annually at January 1), and mature January 1, 2020. (Use interest expense account for accured interest)

Dec 31 - Adjusting entries are made to record the accrued interest on the bonds, and the amortization fo the proper amount of premium. (use straight-line amortization)

Jan 1, 2011 - Interest on the bonds is paid

April 1 - Bonds of par value of $360,000 are called at 102 plus accrued interest, and retired. (Bond premium is to be amortized only at the end of each year.)

Dec 31 - Adjusting enttries are made to record the accrued interest on the bonds, and the proper amount of premium amortized.Prepare jounarl entries for above transactions.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9978310

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