Reference no: EM13906795
Bond Discount, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Discount
On July 1, 2014, Bliss Industries, Inc. issued $58,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%, receiving cash of $46,403,480. Interest on the bonds is payable semi annually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
For all journal entries: For a compound transaction, if an amount box does not require an entry, leave it blank
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds.
2. Journalize the entries to record the following:
a. The first semi annual interest payment on December 31, 2014, and the amortization of the bond discount, using the interest method. (Round to the nearest dollar.)
b. The interest payment on June 30, 2015, and the amortization of the bond discount, using the interest method. (Round to the nearest dollar.)
3. Determine the total interest expense for 2014.
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: Bond Discount, Entries for Bonds Payable Transactions, Interest Method of Amortizing Bond Discount. On July 1, 2014, Bliss Industries, Inc. issued $58,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%, receiving cash of $46,4..
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