Please show the steps clearly
On January1, 2015, Hobart Company issued 2000000 face value of 11% for 20 years and the market rate at time of issuance was 10%.
They use the effective interest method to amortize their bond, interest paid semiannually on Julyt and January 1.
Instructions:
A) Compute the selling price of the bond.
(B) prepare all the necessary journal entries on the books of Hobart co. on July 1, 2015, and December 31, 2016
(C) Hobart Company issued the bond on May 1, 2015. The bond was dated January,1, 2015 and Interest is paid semiannually on Julyl and January. Compute the interest expense from January 1 to May 1, 2015 and prepare the journal entries on May 1, 2015 and July 1, 2015.
