On January 1, 2022, Pina Colada Corp. issued $2,400,000 face value, 6%, 10-year bonds at $2,585,322. This price resulted
Posted: Tue Nov 16, 2021 8:50 am
- On January 1 2022 Pina Colada Corp Issued 2 400 000 Face Value 6 10 Year Bonds At 2 585 322 This Price Resulted 1 (16.87 KiB) Viewed 132 times
a completely incorrect answer.
On January 1, 2022, Pina Colada Corp. issued $2,400,000 face value, 6%, 10-year bonds at $2,585,322. This price resulted in a 5% effective-interest rate on the bonds. Pina Colada uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1.
Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) (1) The issuance of the bonds on January 1, 2022. (2) Accrual of interest and amortization of the premium on December 31, 2022. (3) The payment of interest on January 1, 2023. E (4) Accrual of interest and amortization of the premium on December 31, 2023. ate Account Titles and Explanation Debit Credit 2022 Cash Premium on Bonds Payable Bonds Payable 31, 2022 Interest Expense UNE Premium on Bonds Payable Interest Payable 2023 Interest Payable 31, 2023 Interest Expense Premium on Bonds Payable Interest Payable