Problem 1on january 1 2010 branson designers issued 900, Ask an Expert

Accounting

Problem 1

On January 1, 2010, Branson Designers issued $900 Million of its 8% bonds $836 million. The bonds were then prices to yield 10%. The interest will be payable on June 30 and December 31. Branson records interest using the effective interest method to document the interest paid and discount amortization.

Requirements:

1 "Using the information in Problem 1, complete the following items:

1. Prepare the journal entry to record the interest at June 30, 2010.
2. Prepare the journal entry to record the interest on December 31, 2010

Please show the journal entry to record the issuance of the bond and you must present the effective interest amortization table to support your entries.

Problem 2

On January 1, 2010, Karla Industries issued 10% bonds dated January 1, 2010, which has a face amount of 25 million. The bonds mature in 2020. The market rate of interest 12%. The interest is paid on June 30 and December 31. You must present the effective interest amortization table to support your entries.

Requirements:

2 "Using the information in Problem 2, Please complete the following items:

1. Determine the price of the bonds at January 1, 2010

2. Prepare the journal entry to record the issuance by Karla Industries on Jan 1, 2010

3. Prepare both of the journal entries to record interest on June 30 and December 31.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M92079583

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