On January 1st, 2000, Audrey Corporation issued $100,000 of 10% coupon rate bonds to yield an...

On January 1st, 2000, Audrey Corporation issued $100,000 of 10% coupon rate bonds to yield an effective rate of 12%. Interest is paid semiannually on June 30th and December 31st. The bonds mature in 5 years ie on January 1, 2005. Audrey incurred $10,000 in issuance costs and has a September 30th fiscal year end.

1. Prepare the Journal entry that Audrey corporation would make on September 30th, 2001.

2. prepare Audrey's statement of cash flows for the fiscal year ended September 30th, 2001.

3. assume that on September 30, 2001, Audrey calls the bonds for 97. Prepare the journal entry to record the bond call.

4. prepare Audrey's statement of Cash flows for the fiscal year ended September 30, 2001 assuming the call took place.

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Expert Solution

ekkarill92 answered 4 months ago

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