Durham, Inc. issued $500,000 of its ten-year zero-coupon bonds on January 1, 2016, to yield 9%. The effective interest method is used.
Required:
a. Compute the cash proceeds from the sale of the bond.
b. Prepare the journal entry to record the sale.
c. Prepare the journal entry to record interest for 2017.

Question

Durham, Inc. issued $500,000 of its ten-year zero-coupon bonds on January 1, 2016, to yield 9%. The effective interest method is used. 
 Required: 
a. Compute the cash proceeds from the sale of the bond.
b. Prepare the journal entry to record the sale.
c. Prepare the journal entry to record interest for 2017.

Quizplus · Accepted Answer

The Answer of Durham, Inc. issued $500,000 of its ten-year zero-coupon bonds on January 1, 2016, to yield 9%. The effective interest method is used. 
 Required: 
a. Compute the cash proceeds from the sale of the bond.
b. Prepare the journal entry to record the sale.
c. Prepare the journal entry to record interest for 2017.