XYZ Company issued $10 million, 10% bond for 10 years on May 1, 2000 at...
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XYZ Company issued $10 million, 10% bond for 10 years on May 1, 2000 at a price of $98. The company pays quarterly interest on bonds. The company pays interest on every, March 31, June 30, September 30, and 31 December. Prepare the following journal entries: a. May 1, 2000, to record the issuance of the bonds. b. June 30, 2011, to pay interest and to amortize the bond discount. c. Adjusting entry d. On maturity, to pay interest, amortize the bond premium, and retire the bonds. (make two separate entries). e. What is sinking fund referred to when we talk about bonds issuance?
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