On February 1, 2011, Wolf Inc. issued 10% bonds dated February 1,2011, with a face amount of $200,000. The bonds sold for $239,588and mature in 20 years. The effective interest rate for these bondswas 8%. Interest is paid semiannually on July 31 and January 31.Wolf's fiscal year is the calendar year. Wolf uses the effectiveinterest method of amortization. Required:
1. Prepare the journal entry to record the bond issuance onFebruary 1, 2011.
2. Prepare the entry to record interest on July 31, 2011.
3. Prepare the necessary journal entry on December 31, 2011.
4. Prepare the necessary journal entry on January 31, 2012.
1. Prepare the journal entry to record the bond issuance onFebruary 1, 2011.
2. Prepare the entry to record interest on July 31, 2011.
3. Prepare the necessary journal entry on December 31, 2011.
4. Prepare the necessary journal entry on January 31, 2012.
Related questions
| On February 1, 2016, Sanford & Son issued 12% bonds dated February 1, 2016, with a face amount of $190,000. The bonds sold for $222,604 and mature in 20 years. The effective interest rate for these bonds was 10%. Interest is paid semiannually on July 31 and January 31. Sanford & Son's fiscal year is the calendar year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round final answers to the nearest whole dollar.) |
| 1. Prepare the journal entry to record the bond issuance on February 1, 2016. | ||||
| 2. Prepare the entry to record interest on July 31, 2016, using the straight-line method.
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| On February 1, 2016, Sanford & Son issued 10% bonds dated February 1, 2016, with a face amount of $230,000. The bonds sold for $275,524 and mature in 20 years. The effective interest rate for these bonds was 8%. Interest is paid semiannually on July 31 and January 31. Sanford & Son's fiscal year is the calendar year. A. Record the bond issuance on February 1, 2016. B. Record interest on July 31, 2016, using the straight-line method. C. Record the necessary entry on December 31, 2016. D. Prepare the necessary journal entry on January 31, 2017. |
