Problemon march 1 2014 oaken furniture co issued 700000 of, Ask an Expert

Accounting

Problem;

On March 1, 2014, Oaken Furniture Co. issued $700,000 of 10 percent bonds to yield 8 percent. Interest is payable semiannually on February 28 and August 31. The bonds mature in 10 years. Oaken Furniture Co. is a calendar-year corporation.

Required:

Question 1: Determine the issue price of the bonds. Please show your computations.

Question 2: Prepare an amortization table through the first two interest periods using the effective-interest method.

Question 3: Prepare the journal entries to record bond-related transactions as of the following dates:

March 1, 2014
August 31, 2014
December 31, 2014
February 28, 2015

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164653

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