Prepare a bond discount amortization schedule

Reference no: EM1362236

Travis Co. sold $2,000,000 9% 20 yr. bonds on Jan 1, 2006. The bonds were dated Jan. 1, 2006 and pay interest on Jan 1 and July 1. Travis Co. uses the straight line method to amortize bond premium or discount. the bonds were sold at 96. Assume no interest is accrued on June 30.

Instructions:
a. prepare the journal entry to record the issuance of the bonds on Jan. 1, 2006.
b. Prepare a bond discount amortization schedule for the first 4 interest periods.(amortization $2,000)
c. Prepare the journal entries for interest and the amortization of the discount in 2006 and 2007.
d. Show the balance sheet presentation of the bond liability at Dec. 31, 2007. (discount on bonds payable $72,000)

Reference no: EM1362236

Questions Cloud

Display policy data after revisions have made : The day is not correct for the month (that is, between 1 and 31 for January, 1 and 29 for February, and so on), then set the month, day, and year to 0. Display the policy data after any revisions have been made.

Determine expected return on a portfolio : Security F has an expected return of 12% and a standard deviation of 9% per year. Security G has an expected return of 18% and a standard deviation of 25% per year.

Importance of theory to the mental health counseling : Could you please explain to me what the role and importance of theory to the mental health counseling practice, and include an explanation about the role of new and emerging theories and why they are important?

Create a class for performing arithmetic with fractions : Create a class called Rational for performing arithmetic with fractions. Write a program to test your class. 1/2+2/3+3/4.......+98/99+99/100.Use integer variables to represent the private data of the class

Prepare a bond discount amortization schedule : Travis Corporation sold $2,000,000 9% 20 year bonds on Jan 1, 2006. The bonds were dated Jan. 1, 2006 and pay interest on Jan 1 and July 1. Travis Corporation uses the straight line method to amortize bond premium or discount.

Which firm do you expect to produce more : In a Cournot equilibrium, where both firms produce positive amounts of output, which firm do you expect to produce more. Explain your answer.

Key determinant of financial leverage : All other factors held constant, the present value of a given yearly annuity decreases as the number of discounting periods each year increases.

Computation of investment amount : Suppose the total expense for your current year in college equals $20,000. Approximately how much would your parents have needed to invest 21 years ago in an account paying 8 percent compounded annually to cover this amount?

Explain how many units of labour will valentines hire : Explain how many units of labour will Valentines hire. What wage per unit of labour will Valentines pay.

User Account

All Pages