Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $40,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%, receiving cash of $32,00 Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 20Y1 July 1 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 20Y1 Dec. 31 b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 2012 June 20

Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount On July 1, 20Y1, Livingston Corporation, a wholesaler of manufacturing equipment, issued $40,000,000 of 20-year, 11% bonds at a market (effective) interest rate of 14%, receiving cash of $32,00 Interest on the bonds is payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year. Required: For all journal entries, if an amount box does not require an entry, leave it blank. 1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds. 20Y1 July 1 2. Journalize the entries to record the following: a. The first semiannual interest payment on December 31, 20Y1, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 20Y1 Dec. 31 b. The interest payment on June 30, 20Y2, and the amortization of the bond discount, using the interest method. Round to the nearest dollar. 2012 June 20

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Subject : Accounting