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(Show Work and Calculations) On January 2, 2011 N&M Company issued $1 Million of 5-year, 3% bonds...

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Accounting

(Show Work and Calculations)

On January 2, 2011 N&M Company issued $1 Million of 5-year,3% bonds for $940,000, their interest payable semiannually everyJune 30, and Deember 31. N&M uses stright line amortization,having judged the difference under the effective interest method tobe immaterial.

On February 28, 2015, N&M retired $100,000 of the bonds at98.

Prepare the journal entries N&M should have made on each ofthe following dates:

1. February 28, 2015. 2. June 30, 2015.

Answer & Explanation Solved by verified expert
3.9 Ratings (727 Votes)
Discount on bonds issued face value issue price 1000000 940000 60000 Discount amortization per year Total discount number of years to retirement 600005 12000 On feb 28 2015 only 10 months of discount balance is left of the 5 years 60000 X 1060 10000 Discount balance applicable    See Answer
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