On June 30, 2017, ABC Co. issued $6,000,000, 6%, 4-year bonds. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on June 30 and December 31. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on June 30, 2017. b. Prepare the necessary journal entry on December 31, 2017. c. Assume that the bond was issued on August 31, 2017, prepare the journal entry on December 31, 2017. d. Assume that the accounting date for ABC Corporation is October 31, prepare the journal entry on October 31, 2017. ORGARE

On June 30, 2017, ABC Co. issued $6,000,000, 6%, 4-year bonds. The bonds were sold to yield an effective-interest rate of 8%. Interest is paid semiannually on June 30 and December 31. The company uses the effective-interest method of amortization. Required: For ABC Co. answer the following independent requirements: a. Prepare the necessary journal entry on June 30, 2017. b. Prepare the necessary journal entry on December 31, 2017. c. Assume that the bond was issued on August 31, 2017, prepare the journal entry on December 31, 2017. d. Assume that the accounting date for ABC Corporation is October 31, prepare the journal entry on October 31, 2017. ORGARE

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 7C

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