Clearview Corporation had the following bond issue:
Date of issue/sale: March 1, 20-A
Face value: $700,000
Sale price of bonds: 103
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on August 31 and February 28

Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on March 1, 20-A.
b.
The interest payment and premium amortization on the bonds for the first six months.
c.
The year-end adjusting entry for interest and premium amortization.
d.
The reversing entry for January 1, 20-B.

Question

Clearview Corporation had the following bond issue:
Date of issue/sale: March 1, 20-A
Face value: $700,000
Sale price of bonds: 103
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on August 31 and February 28
​
Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on March 1, 20-A.
b.
The interest payment and premium amortization on the bonds for the first six months.
c.
The year-end adjusting entry for interest and premium amortization.
d.
The reversing entry for January 1, 20-B.

Quizplus · Accepted Answer

The Answer of Clearview Corporation had the following bond issue:
Date of issue/sale: March 1, 20-A
Face value: $700,000
Sale price of bonds: 103
Life of bonds: 10 years
Stated rate: 6% a year payable semiannually on August 31 and February 28
​
Required:
Prepare the following general journal entries.
a.
The issuance of the bonds on March 1, 20-A.
b.
The interest payment and premium amortization on the bonds for the first six months.
c.
The year-end adjusting entry for interest and premium amortization.
d.
The reversing entry for January 1, 20-B.

Clearview Corporation Had the Following Bond Issue