Abscon Investment Banking Ltd.organized a bond issue for the DL Company.The size of the issue was $3,000,000 with a stated interest rate of 8% payable on May 1 and November 1,for each of the next ten years.The bonds were issued on August 1,2017 with DL Company receiving 109 1/2.DL Company amortizes bond premiums and discounts using the effective-interest method.On the date of issue the market interest rate was 6.7%.
Prepare the following journal entries:
a_The entry for DL Company to record the August 1,2017 issue.
b_The entry on November 1,2017.
c_The December 31,2017 adjusting entry.

Question

Quizplus · Accepted Answer

The Answer of Abscon Investment Banking Ltd.organized a bond issue for the DL Company.The size of the issue was $3,000,000 with a stated interest rate of 8% payable on May 1 and November 1,for each of the next ten years.The bonds were issued on August 1,2017 with DL Company receiving 109 1/2.DL Company amortizes bond premiums and discounts using the effective-interest method.On the date of issue the market interest rate was 6.7%.
Prepare the following journal entries:
a_The entry for DL Company to record the August 1,2017 issue.
b_The entry on November 1,2017.
c_The December 31,2017 adjusting entry.