Discuss the below in detail:
Q: BONDS ISSUED AT A DISCOUNT Brandon, Inc., issued the following bonds at a discount:
Date of issue and sale: ...........April 1, 20-1
Principal amount: .................$600,000
Sale price of bonds: ...............96
Denomination of bonds: .........$1,000
Life of bonds: .....................10 years
Stated rate: ........................7%, payable semiannually on
.......................................September 30 and March 31
REQUIRED
Q1. Prepare journal entries for:
(a) Issuance of the bonds at a discount.
(b) Interest payment and discount amortization on the bonds on September 30, 20-1.
(c) Year-end adjustment on the bonds for 20-1.
(d) Reversing entry for the beginning of 20-2.
(e) Interest payments and discount amortization on the bonds for 20-2 (March 31 and September 30).
Q2. Calculate the carrying value of the bonds on September 30, 20-2.