Squirrel Ltd issued $20,000,000 of bonds on June 1, 2022. The bond issue carries an interest rate of 8.5% and matured June 1, 2028. Interest on the issue is paid on December 1 and June 1. When issued on June 1, market rates had moderated somewhat and the issue was priced to yield 8.0%. Squirrel has a September 30 year end. Required: 1. Prepare all journal entries required to record the bond for the first full calendar year the bonds are outstanding. 2. Show how all aspects of the bond will be reflected in the 2018 financial statements of Pepperpota Ltd.

Squirrel Ltd issued $20,000,000 of bonds on June 1, 2022. The bond issue carries an interest rate of 8.5% and matured June 1, 2028. Interest on the issue is paid on December 1 and June 1. When issued on June 1, market rates had moderated somewhat and the issue was priced to yield 8.0%. Squirrel has a September 30 year end. Required: 1. Prepare all journal entries required to record the bond for the first full calendar year the bonds are outstanding. 2. Show how all aspects of the bond will be reflected in the 2018 financial statements of Pepperpota Ltd.

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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