Flower Garden issued $8,000,000 of 8% debentures bonds on Jan 1, 2014 and received cash...
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Flower Garden issued $8,000,000 of 8% debentures bonds on Jan 1, 2014 and received cash totaling $7,098,102. The bonds which are due in 10 years pay interest semiannually on July 1 and Jan 1. The firm uses the effective-interest method of amortizing discounts and premiums. The bonds were sold to yield an effective-interest rate of 10%. Instructions: Show your computations on this word document to receive credit
a. Prepare schedule of interest and discount amortization during the first two years these bonds were outstanding. (Show computations and round to the nearest dollar.).
b. Prepare January 1, 2014 issuance
c. Prepare July 1 2014 interest payment Prepare the December 31st 2014 adjusting entry
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