Prepare journal entries to record the following transactions relating to long-term bonds of Ramirez, Inc. (Show...

Prepare journal entries to record the following transactions relating to long-term bonds of Ramirez, Inc. (Show computations)

a) On March 1, 2018, Ramirez, Inc. issued $10,000,000, 9% coupon rate bonds. The market interest rate was 12%. Interest is payable semiannually on February 1 and August 1 with the bonds maturing on February 1, 2021. Hint: This is a bond issued between interest dates.

b) On August 1, 2018, Ramirez paid interest on the bonds and recorded amortization. Ramirez uses effective-interest method of amortization.

c) On September 1, 2018. Ramirez purchased $6,000,000 face value (60% of initial issuance amount) of the bonds at the $6,200,000 PLUS accrued interest.

Expert Solution

ekkarill92 answered 1 year ago

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