E11-18 Assignment - was not accrued on June 30(c The...

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*E11-18 Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2008, for $562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following. (Round to the nearest dollar.) (a) The issuance of the bonds. (b) The payment of interest and the discount amortization on July 1, 2008, assuming that interest
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Unformatted text preview: was not accrued on June 30. (c) The accrual of interest and the discount amortization on December 31, 2008. Solution (a) Jan. 1 Cash 600,000 Notes Payable 600,000 (b) July 1 Bond Interest Expense 56,261 Discount on Bonds Payable 2,261 Bond Interest Payable 54,000 (c) Dec. 31 Bond Interest Expense 56,487 Discount on Bonds Payable 2,487 Bond Interest Payable 54,000...
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This note was uploaded on 03/28/2011 for the course ACCT 349 taught by Professor Goyal during the Spring '09 term at University of Phoenix.

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