BONDS ISSUED AT A DISCOUNT
BONDS ISSUED AT A DISCOUNT
Brenner’s Home Club issued the following bonds at a discount:Date of issue and sale: ……..April 1, 20-1Principal amount: ……….$500,000Sale price of bonds: ………98Denomination of bonds: ……..$1,000Life of bonds: …………10 yearsStated rate: …………. 7%, payable semiannually on ……………….September 30 and March 31
Prepare journal entries for:
(a) Issuance of the bonds at a discount.
(b) Interest payment and discount amortization on the bonds on September 30.
(c) Year-end adjustment on the bonds.
Solution:
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