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Prepare a bond a bond interest expense

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Reference no: EM131732888

Question - Martha Corporation issued $800,000 of 12% bonds on April 1, 2016 for $851,705.70.  The bonds are due March 31, 2020, were issued to yield 10%, and pay interest semiannually on September 30 and March 31.   Martha Corporation uses the effective interest method.

Required:

1. Prepare a bond a bond interest expense and premium amortization schedule.

2. Assume the company retired the bonds on June 30, 2017, for $848,000, which includes accrued interest.  Prepare the journal entries to record the bond retirement.

Reference no: EM131732888

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