The Sleepy Corporation issued $1,000,000 of ten year bonds on January 1, 2019. The interest rate on the bonds is 9%, and the interest is paid semi-annually on July 1 and January of each year. The bonds were issued at 102. The straight-line method for amortizing discounts and premiums is used. a. Were the bonds issued at a discount or premium? b. Prepare the journal entries on 1. January 1, the date the bonds were issued December 31, 2019, for the year end journal entry to record interest expense and amortization of discount/premium 2. c. Calculate the total amount of interest expense on the 2019 income statement. d. Calculate the carry value of the bonds on December 31, 2019
The Sleepy Corporation issued $1,000,000 of ten year bonds on January 1, 2019. The interest rate on the bonds is 9%, and the interest is paid semi-annually on July 1 and January of each year. The bonds were issued at 102. The straight-line method for amortizing discounts and premiums is used. a. Were the bonds issued at a discount or premium? b. Prepare the journal entries on 1. January 1, the date the bonds were issued December 31, 2019, for the year end journal entry to record interest expense and amortization of discount/premium 2. c. Calculate the total amount of interest expense on the 2019 income statement. d. Calculate the carry value of the bonds on December 31, 2019
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
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