Accounting 221 Homework 2-8
Bigricker12
wk_8_hw_problems.xlsProblem
| Standard Atlantic Shipping issued $5,000,000, face amount, of 7% bonds on January 1, 20X3. The bonds are 5-year bonds, and Interest is payable every 6 months. At the time of issue, the market rate of interest was only 6%, so the bonds were issued at a premium. The issue price was $5,213,325. | |
| (a) | Use the effective-interest method of amortization, and prepare the journal entries that Standard Atlantic Shipping would record on January 1, 20X3, June 30, 20X3, and December 31, 20X3. |
| (b) | Show how the bonds would appear on Standard Atlantic Shipping's December 31, 20X3 balance sheet. |
&R&"Myriad Web Pro,Bold"&20B-13.09
B-13.09
Worksheet
| (b) | |||||
| GENERAL JOURNAL | |||||
| Date | Accounts | Debit | Credit | ||
| 1-Jan | |||||
| 30-Jun | |||||
| 31-Dec | |||||
| (c) | Bonds payable | ||||
| Plus: Premium on bonds payable |
&L&"Myriad Web Pro,Bold"&12Name:
Date: Section: &R&"Myriad Web Pro,Bold"&20B-13.09
B-13.09
