Unamortized discount-premium on the effective interest basis

Reference no: EM13155155

On January 1, 2010, Osborn Company sold 12% bonds having a maturity value of $800,000 for $860,651.79, which provides the bondholders with a 10% yield. The bonds are dated January 1, 2010, and mature January 1, 2015, with interest payable December 31 of each year. Osborn Company allocates interest and unamortized discount or premium on the effective interest basis.

(a) Prepare the journal entry at the date of the bond issuance.

(b) Prepare a schedule of interest expense and bond amortization for 2010-2012.

(d) Prepare the journal entry to record the interest payment and the amortization for 2012.

Reference no: EM13155155

Questions Cloud

Cash until the note matures : Max Company purchased equipment on November 1, 2010 and gave a 16-month, 12% note with a face value of $5,000. Interest will not be paid in cash until the note matures. The December 31, 2010 adjusting entry is ??

Compute depreciation for meca concrete : Meca Concrete purchased a mixer on January 1, 2007, at a cost of $45,000. Straight-line depreciation for 2007 and 2008 was based on an estimated 8-year life and $3,000 estimated residual value. Compute depreciation for 2009 and 2010.

Complete the production cost report : Massey Corporation uses a process cost system and the weighted-average cost flow assumption. Production begins in the Fabricating Department-Complete the Production Cost Report for March

Settlement of equity : Partners share profits and losses as follows: Adams 20%; Bell 30%; and Cooley 50%. If Cooley retires and withdraws $40,000 in settlement of her equity and settlements are allocated according to capital interests, the amount entered in Adams's capi..

Unamortized discount-premium on the effective interest basis : The bonds are dated January 1, 2010, and mature January 1, 2015, with interest payable December 31 of each year. Osborn Company allocates interest and unamortized discount or premium on the effective interest basis.

Balance sheet and statement of cash flows : eWare Corp started operations Jan 1, 2009. Using the information from December 31, 2009 prepare income statement, retained earnings statement, balance sheet and statement of cash flows:

Problem regarding sole propritorship : Luis is the sole shareholder of Stork Inc. a C corporation, and Eduardo owns a sole propritorship. Both businesses were started in 2010 and make a profit of 80,000 this year. Each owner withdraws 50,000 from his business during the year. Which of ..

Understanding inventory valuation methods : Explain the importance of understanding inventory valuation methods in determining the quality of the profit numbers.

Determine the effects of an increase in the capital stock : determine the effects of an increase in the capital stock on current equilibrium output, employment, the real wage, the real interest.

User Account

All Pages