Nicholas Ram Corporation have a $2,500,000 "bond issue" dated March 1, 2016 due in 15 years with an annual interest rate of 15%. Interest is payable March 1 and September 1. On August 1, 2016, the bond was sold for $2,578,750 plus accrued interest. Using the straight-line method, prepare the general journal entries for each of the following: a) The issuance of the bond on August 1, 2016. b) Payment of the semi-annual interest and the amortization of the premium on September 1, 2016. c) Accrual of the interest and the amortization of the premium on December 31, 2016. d) Payment of the semi-annual interest and the amortization of the premium on March 1, 2017.

Nicholas Ram Corporation have a $2,500,000 "bond issue" dated March 1, 2016 due in 15 years with an annual interest rate of 15%. Interest is payable March 1 and September 1. On August 1, 2016, the bond was sold for $2,578,750 plus accrued interest. Using the straight-line method, prepare the general journal entries for each of the following: a) The issuance of the bond on August 1, 2016. b) Payment of the semi-annual interest and the amortization of the premium on September 1, 2016. c) Accrual of the interest and the amortization of the premium on December 31, 2016. d) Payment of the semi-annual interest and the amortization of the premium on March 1, 2017.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...

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