Rico company issued $400,000, 9%, 20 year bonds on january 1,2017, at 103. Interest is payable annually on January 1. Rico usesstraight-line amortization for bond premium or discount.
Instructions
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Prepare the journal entries to record the following.
a) The issuance of the bonds
b) The accrual of interest and the premium amortization ondecember 31, 2017
c) The payment of interest on january 1, 2018
d) The redemption of the bonds at maturity, assuming interestfor the last interest period has been paid and recorded.
