- On September 1 2011 Park Rapids Lumber Company Issued S80 Million In 20 Year 19 Percent Bonds Payable Interest Is Paya 1 (17.75 KiB) Viewed 30 times
On September 1, 2011. Park Rapids Lumber Company issued S80 million in 20-year 19 percent bonds payable Interest is payable semiannually on March 1 and September 1. Benedicts premiums are amortized at each interest payment date and at year-end. The company's fiscal year ends at December 31. a. Instructions Make the necessary adjusting entries at December 31, 2011, and the journal entry to record the payment of bond interest on March 1, 2012, under each of the following assumption 1. The bonds were issued at 98. (Round to the nearest dollar) 2. The bonds were issued at 101. (Round to the nearest dollur.) b. Compute the net bond liability at December 31, 2012, under assumptions 1 and 2 above (Round to the nearest dollar.) Under which of the above assumptions, 1 or 2, would the investor's effective rate of interest higher? Explain of Minnesota Satellite Telepho c.