An effective-interest rate of on the bonds


Pedigo Company issued $450,000, 7%, 10 year bonds on january 1, 2010, for $483,120. This price resulted in an effective-interest rate of 6% on the bonds. Interest is payable annuallyy on january 1. Pedigouses the effective-interest method to amortize bond premium or discount. Prepare the journal entries to record: (a) the insurance of the bonds. (b) the accrual of interest and the premium amortization on Dec. 31,2010 (c) the payment of interest on Jan 1, 2011

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Accounting Basics: An effective-interest rate of on the bonds
Reference No:- TGS0670695

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