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  3. on january 1, 2006, adam, inc. issued $900,000, 5%

On January 1, 2006, Adam, Inc. issued $900,000, 5% bonds when the market rate was...

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Accounting

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On January 1, 2006, Adam, Inc. issued $900,000, 5% bonds when the market rate was 7%. Interest is payable semiannually on June 30 and December 31 with the bonds maturing on December 31, 2015 (10 years). The bonds are callable at 103. On December 31, 2010, Adam retired $450,000 of the bonds at the call price. At the time they retired the bonds, they also paid the accrued interest for those bonds retired. Required: a. Prepare the journal entry to record the issuance of the bonds. b. Lenore uses the effective interest method to amortize any discount or premium. Prepare an amortization schedule for the bonds c. Prepare any required journal entries for interest payments for the first year 2006. d. Prepare all required entries to record the retirement of the bonds on December 31, 2010, including the payment of accrued interest

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