The Wilfred Company sold 8% bonds, dated January 1, with a face amount of $90 million on January 1, year 1 to Rexton-Base Corporation. The bonds mature on December 31, year 10 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest revenue on June 30, year 1 (at the effective rate).

The Wilfred Company sold 8% bonds, dated January 1, with a face amount of $90 million on January 1, year 1 to Rexton-Base Corporation. The bonds mature on December 31, year 10 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. Prepare the journal entry to record interest revenue on June 30, year 1 (at the effective rate).

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 9EA: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The...

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