Minder86
Jul 10, 2009, 06:29 PM
Hi there, Im interested in starting a program in accounting at ubc. I was not sure what I wanted to do but found accounting interesting. I had a hard time figuring this out. I needed help with the answer :
On otctober 1, 2007, fpo Corp, issued $600,000 of 10 year, 6% bonds at 98. The bonds pay interest annually on otctober 1. FPO's year end is September 30.
1. record the issue of the bonds on October 1, 2007.
2. record the accrual of interest on September 30, 2008, assuming the amortization amount is $2,127.
3. record the payment of interest on October 1, 2008
4. assume that on October 1, 2008, after payment of the interest, FPO redeems all of the bonds at 102. Record the redemption on the bonds.
This is the answers that I have. If you see anythign wrong with it. Let me know and please let me know how to solve this question
my answers :
1. cash (600,000 x 98%) 588,000
discount on bonds payable 12,000
bonds payable 600,000
2. Interest Expense (36,000 + 2,127) 38,127
Discount on Bonds Payable 2,127
Cash (6% x 600,000 x 12/12) 36,000
After that I wasn't sure.
On otctober 1, 2007, fpo Corp, issued $600,000 of 10 year, 6% bonds at 98. The bonds pay interest annually on otctober 1. FPO's year end is September 30.
1. record the issue of the bonds on October 1, 2007.
2. record the accrual of interest on September 30, 2008, assuming the amortization amount is $2,127.
3. record the payment of interest on October 1, 2008
4. assume that on October 1, 2008, after payment of the interest, FPO redeems all of the bonds at 102. Record the redemption on the bonds.
This is the answers that I have. If you see anythign wrong with it. Let me know and please let me know how to solve this question
my answers :
1. cash (600,000 x 98%) 588,000
discount on bonds payable 12,000
bonds payable 600,000
2. Interest Expense (36,000 + 2,127) 38,127
Discount on Bonds Payable 2,127
Cash (6% x 600,000 x 12/12) 36,000
After that I wasn't sure.