Greetings. I am having problems solving a discussion question for my Accounting Homework. Would someone be willing to help me with this problem? It is on Bonds Payable (Calculating Issue Price & Amortize Premium). Thank you!
On January 1, 2016, Learned, Inc., issued $70 million face amount of 20-year, 14% stated rate bonds when market interest rates were 16%. The bonds pay interest semi-annually each June 30 and December 31 and mature on December 31, 2035.
REQUIRED:
B) Assume instead that the proceeds were $72,400,000. Use the horizontal model (or write the journal entry) to record the payment of semi-annual interest and the related premium amortization on June 30, 2016, assuming that the premium of $2,400,000 is amortized on a straight-line basis.