Semi-annual interest to interest unamortized bond

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Reference no: EM13299956

On June 30, 2014, Griffin, Inc. sold $3,000,000 (face value) of bonds. The bonds are dated June 30, 2014, pay interest semiannually on December 31 and June 30, and will mature on June 30, 2017. The following schedule was prepared by the accountant for Griffin, Inc. for 2014.

Semi-Annual Interest to Interest Unamortized Bond

Interest Period be Paid Expense Amortization Amount Carrying Value

$75,000 $2,936,625

1 $120,000 $131,625 $11,625 63,375 1,936,625

Instructions

On the basis of the above information, answer the following questions. (Round your answer to the nearest dollar or percent.)

1. What is the stated interest rate for this bond issue?

2. What is the market interest rate for this bond issue?

3. What was the selling price of the bonds as a percentage of the face value?

4. Prepare the journal entry to record the sale of the bond issue on June 30, 2014.

5. Prepare the journal entry to record the payment of interest and amortization on December 31, 2014.

Reference no: EM13299956

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