Consider the following information:
|
2015 |
|
|
Jun. 1 |
Zenith Manufacturing Company Limited received authorization to issue $8,000,000 3-year, 12-per cent bonds. The interest is to be paid semi-annually June 1 and December 1 of each year. |
|
Jun. 1 |
Issued $4,000,000 of bonds for $4,142,800 cash. |
|
2016 |
|
|
Sep. 1 |
Issued another $4,000,000 of bonds at 97.76 plus accrued interest. |
The year-end of Zenith is December 31.
Required: Prepare the journal entries to record:
- The issue of the bonds on June 1, 2015;
- The payment of bond interest expense on December 1, 2015;
- The accrual of bond interest expense and recording of amortization at year-end on December 31, 2015;
- The payment of bond interest expense on June 1, 2016;
- The issue of bonds on September 1, 2016; and
- The final interest payment, premium and discount amortization, and retirement of the bonds at maturity, June 1, 2018.
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