Prepare the journal entry at retirement

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Reference no: EM131911222

Problem

Manufacturing Company issued $1,800,000 par? value, 10?%, five?-year bonds dated January? 1, 2016. The bonds pay interest semiannually each June 30 and December 31. Delta issued the bonds on April? 30, 2016, when the market rate of interest was 12?%. Bond issue costs were $52,000.

a. Determine the bond issue price including accrued interest on April? 30, 2016.

b. Prepare an amortization table for the bond? issue, assuming that Delta uses the effective interest rate method of amortization.

c. Prepare the journal entries required on the date of issue and on the first two interest dates in 2016?: June 30 and December 31.

d. The bonds are retired on June? 30, 2018?, for $1,730,000. Prepare the journal entry at retirement.

Reference no: EM131911222

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