On January 1, 2018 the White Company issued 25-year, 9% bonds with a par value...
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Question
Accounting
On
January
1,
2018
the
White
Company
issued
25-year,
9%
bonds
with
a
par
value
of
$1,600,000
when
the
market
rate
of
interest
was
8%.
The
bonds
pay
interest
annually
on
December
31.
Required:
1.
Compute
the
proceeds
from
the
issuance
of
the
bonds.
2.
Prepare
the
entry
to
record
the
issuance
of
the
bonds.
3.
Prepare
the
entries
to
record
the
amortization
and
interest
payment
for
each
of
the
first
two
years
assuming
straight-line
amortization.
4.
Prepare
the
entries
to
record
the
amortization
and
interest
payment
for
each
of
the
first
two
years
assuming
effective-rate
amortization.
Be
sure
to
prepare
an
amortization
schedule.
5.
Prepare
the
entry
to
record
the
retirement
of
the
bonds
at
the
maturity
date.
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