How to amortize the bond premium


Swanson Corporation issued $8 million of 20-year, 8 percent bonds on April 1, 2011, at 102. Interest is due on March 31 and September 30 of each year, and all of the bonds in the issue mature on March 31, 2031. Swanson's fiscal year ends on December 31. Prepare the following journal entries: Prepare the journal entry at

April 1, 2011, to record the issuance of the bonds?

  • Debit
  • Credit
  • Credit

Prepare the journal entry at September 30, 2011, to pay interest and to amortize the bond premium.?

  • Debit
  • Credit
  • Credit

Prepare the journal entry at March 31, 2031, to pay interest, amortize the bond premium, and retire the bonds at maturity (make two separate entries).?

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Accounting Basics: How to amortize the bond premium
Reference No:- TGS0705398

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