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palmena
Mar 8, 2007, 01:08 PM
(Entries for Bond Transactions-Effective Interest)
Celine Dion Company issued $600,000 of 10%, 20-year bonds on January 1, 2008, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the effective interest method of amortization for bond premium or discount. Assume an effective yield of 9.7705%.

Instructions
Prepare the journal entries to record the following. (Round answers to the nearest dollar. List multiple debit/credit entries in order of magnitude.)
(a) The issuance of the bonds.
(b) The payment of interest and the related amortization on July 1, 2008.
(c) The accrual of interest and the related amortization on December 31, 2008.