Question - Rogers Communication Inc. is a diversified Canadian communications and media company engaged in wireless, cable and media communication. On March 15, 2013, Rogers sopld notes with the following specifications:
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Principle amount
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$460 million
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Maturity date
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March 15, 2023
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Issue price
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99.845% of principal amount
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Coupon rate
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3.17%
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Effective interest rate
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3.188%
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Interest payment dates
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March 15 and September 15
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Required:
1. Prepare a journal entry to record the sale of these notes on March 15, 2013.
2. Prepare the journal entry to record the payment of interest and amortization of the discount on September 15, 2013. The company uses the effective-interest method of amortization.
3-a. Compute the interest expense that accrued from September 15, 2013, to December 31, 2013, the end of Rogers' fiscal year.
3-b. Prepare the adjusting journal entry on December 31, 2013, to record interest expense and amortization of the discount on the notes.
4. Show the amounts that should be reported on Rogers' financial statements for 2013.
5. Compute the total amount of interest expense over the life of the notes.