Worthington company issued 1000000 face value six-year 10, Ask an Expert

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Worthington Company issued $1,000,000 face value, six-year, 10% bonds on 7/1/2012, when the market rate of interest was 12%. Interest payments are due every 7/1 and 1/1. Worthington uses a calendar year end.

Required

1. Prepare the journal entry to record the issuance of the bonds on 7/1/2012.
2. Prepare the adjusting journal entry on 12/31/2012, to accrue interest expense.
3. Prepare the journal entry to record the interest payment on 1/1/2013.
4. Calculate the amount of cash that will be paid for the retirement of the bonds on the maturity date.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9978390

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