On January 1,2019,Jaspo,Inc.issued a $1,000,5%,five-year bond for $1,092 when the market rate was 3%.The bond was dated on January 1,2019,and interest is payable each December 31.Jaspo,Inc.has a December 31 year-end and uses the effective interest method of amortization.Jaspo does not use a discount or a premium account for bonds in its accounting records.
A.Prepare the journal entry required on January 1,2019.
B.Prepare the journal entry required on December 31,2019.Round the entry items to whole dollar amounts.
C.Was the bond issued at par,at a premium,or at a discount?
D.What is the carrying value (book value)of the bond at December 31,2019? Round your answer to a whole dollar amount.
E.Where in the financial statements does the carrying value of the bond appear? (Be specific).
F.On what date does the bond issue mature?

Question

Quizplus · Accepted Answer

The Answer of On January 1,2019,Jaspo,Inc.issued a $1,000,5%,five-year bond for $1,092 when the market rate was 3%.The bond was dated on January 1,2019,and interest is payable each December 31.Jaspo,Inc.has a December 31 year-end and uses the effective interest method of amortization.Jaspo does not use a discount or a premium account for bonds in its accounting records.
A.Prepare the journal entry required on January 1,2019.
B.Prepare the journal entry required on December 31,2019.Round the entry items to whole dollar amounts.
C.Was the bond issued at par,at a premium,or at a discount?
D.What is the carrying value (book value)of the bond at December 31,2019? Round your answer to a whole dollar amount.
E.Where in the financial statements does the carrying value of the bond appear? (Be specific).
F.On what date does the bond issue mature?