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Selected accounts from the trial balances of Mountbatten Corp. at December 31 are presented below:
The bonds were authorized on April 1, 2015 but not issued until July 1, 2015. Interest is paid semi-annually on April 1 and October 1. Straight-line amortization is used.
Required:
- Compute the following:
- original issue price as of July 1, 2015
- maturity date.
- Reconstruct the journal entry to record the issuance of the bonds on July 1, 2015.
- Prepare any required adjusting entries as of December 31, 2017. Assume that straight-line amortization is recorded at year-end and also each time interest is paid.
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