Problem: Minimus sold a 100,000 9% 3 year bond issue due on march 31 year 1 at a price yield to investors 10%. Interest rates are per annum compounded semi-annually. The bond interest is payable each september 30 and march 31, with the first payment due september 30 year 1. Premium or discount is amortized by straight line method. Year end is dec 31
Calculate the price the bond sold for
Prepare all year 1 journal entries, plus the journal entry needed march 31 year 2
Show how the bond will be reported on dec 31 year 1