Millwood Company prepared a bond issue dated January 1, 20X1. On January 1, 20X1, the company sold $100,000 of its par value bonds at 103. The bonds mature in thirty years and have a stated rate of interest of 8% per year. Interest is payable annually on December 31. Straight-line amortization is used (round to the nearest dollar).
(a) Give the entry to record the sale of bonds on January 1, 20X1:
(b) Give the entry to record interest expense at December 31, 20X1 (end of the annual accounting period)
(c) Show how the bonds would be reported on the statement of financial position of Millwood Company dated December 31, 20X3

Question

Millwood Company prepared a bond issue dated January 1, 20X1. On January 1, 20X1, the company sold $100,000 of its par value bonds at 103. The bonds mature in thirty years and have a stated rate of interest of 8% per year. Interest is payable annually on December 31. Straight-line amortization is used (round to the nearest dollar). 
(a) Give the entry to record the sale of bonds on January 1, 20X1: 
(b) Give the entry to record interest expense at December 31, 20X1 (end of the annual accounting period) 
(c) Show how the bonds would be reported on the statement of financial position of Millwood Company dated December 31, 20X3

Quizplus · Accepted Answer

The Answer of Millwood Company prepared a bond issue dated January 1, 20X1. On January 1, 20X1, the company sold $100,000 of its par value bonds at 103. The bonds mature in thirty years and have a stated rate of interest of 8% per year. Interest is payable annually on December 31. Straight-line amortization is used (round to the nearest dollar). 
(a) Give the entry to record the sale of bonds on January 1, 20X1: 
(b) Give the entry to record interest expense at December 31, 20X1 (end of the annual accounting period) 
(c) Show how the bonds would be reported on the statement of financial position of Millwood Company dated December 31, 20X3

Millwood Company Prepared a Bond Issue Dated January 1, 20X1