Question
In: Accounting
Martinez Co. is building a new hockey arena at a cost of $2,690,000. It received a...
Martinez Co. is building a new hockey arena at a cost of $2,690,000. It received a downpayment of $550,000 from local businesses to support the project, and now needs to borrow $2,140,000 to complete the project. It therefore decides to issue $2,140,000 of 12%, 10-year bonds. These bonds were issued on January 1, 2016, and pay interest annually on each January 1. The bonds yield 11%.
- Prepare the journal entry to record the issuance of the bonds on January 1, 2016.
- Prepare a bond amortization schedule up to and including January 1, 2020, using the effective interest method.
- Assume that on July 1, 2019, Martinez Co. redeems half of the bonds at a cost of $1,173,900 plus accrued interest. Prepare the journal entry to record this redemption.
Solutions
ekkarill92 answered 3 months agoRelated Solutions
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