Saturday, August 13, 2011

How do i journalize bonds? my prof. has been out for three weeks and I can't figure out my homework?

The question is: On the first day of it's fiscal year Robbins Co. issues $50000000 of five year, 8% bonds to finance it's operations of producing and selling home improvement products.Intrest is payable semiannualy. The bonds were issued at an effective interest rate of 11%, resulting in Robbins Co. receiving cash of $44,346,760. Journalize the entries to record the following: 1. sale of bonds 2. First Semiannual interest payment (Amortization of discount is to be recorded annually) 3. second seimeannual interest payment 4Amortization of discount at the end of the first year, using straight line method

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