On May 1, 2018, EastCo issued $1,150,000 of 5% bonds, with interest paid semi-annually on April...

On May 1, 2018, EastCo issued $1,150,000 of 5% bonds, with interest paid semi-annually on April 30 and October 31. The bonds were originally dated November 1, 2006, and were 20-year bonds. The effective interest rate on the day of issuance was 6%. The company uses the effective method to measure interest expense.

a. calculate the issue proceeds at may 1, 2018

b. prepare the journal entry for may 1, 2018

c. prepare the journal entry for june 30, 2018 (the fiscal year-end)

d. prepare the journal entry for october 31, 2018

e. prepare the journal entry for april 30, 2019

f. calculate the value of the bond on the june 30, 2018 balance sheet.

Expert Solution

ekkarill92 answered 2 years ago

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