On January 1, 2020, Goodwill Company issued 10% bonds dated January 1, 2011, with a face amount of $600,000. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2020. 2. Prepare the journal entry to record the bond issuance by Goodwill Company on January 1, 2020. 3. Prepare the journal entry to record interest on June 30, 2020, using the effective interest method.

On January 1, 2020, Goodwill Company issued 10% bonds dated January 1, 2011, with a face amount of $600,000. The bonds mature in 2030 (10 years). For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31. Required: 1. Determine the price of the bonds at January 1, 2020. 2. Prepare the journal entry to record the bond issuance by Goodwill Company on January 1, 2020. 3. Prepare the journal entry to record interest on June 30, 2020, using the effective interest method.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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