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AP 10–3

14 August, 2015 - 17:32
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On January 2, 2015, Jamaica Company Ltd. issued $2,000,000, 3-year, 12% bonds at 97. Interest on the bonds is payable semi-annually on June 30 and December 31. Jamaica’s year-end is December 31.

Required:

  1. Prepare all journal entries necessary on the following dates:
    1. January 2, 2015
    2. June 30, 2015
    3. December 31, 2015
    4. January 2, 2018.
  2. Calculate the amount of interest paid in cash in 2015.
  3. Calculate the interest expense reported on the 2015 income statement.
  4. What is the balance of the Bond Discount account in the general ledger at December 31, 2015?
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