Steamboat Company issued the following ten-year bonds on January 1, 2016: $100,000 maturity value, 6% interest payable annually on each December 31. The bonds were dated January 1, 2016 and the accounting period ends December 31. The bonds were issued for $93,000. Steamboat uses the effective-interest method for amortization. The amortization for 2016 was $510.
Required:
A.
B.Assuming instead that the accounting period ends on June 30, prepare the adjusting entry related to interest expense and the interest accrual at June 30.No adjusting entries have been made during the year.

Question

Steamboat Company issued the following ten-year bonds on January 1, 2016: $100,000 maturity value, 6% interest payable annually on each December 31. The bonds were dated January 1, 2016 and the accounting period ends December 31. The bonds were issued for $93,000. Steamboat uses the effective-interest method for amortization. The amortization for 2016 was $510.
Required:
A.  
B.Assuming instead that the accounting period ends on June 30, prepare the adjusting entry related to interest expense and the interest accrual at June 30.No adjusting entries have been made during the year.

Quizplus · Accepted Answer

The Answer of Steamboat Company issued the following ten-year bonds on January 1, 2016: $100,000 maturity value, 6% interest payable annually on each December 31. The bonds were dated January 1, 2016 and the accounting period ends December 31. The bonds were issued for $93,000. Steamboat uses the effective-interest method for amortization. The amortization for 2016 was $510.
Required:
A.  
B.Assuming instead that the accounting period ends on June 30, prepare the adjusting entry related to interest expense and the interest accrual at June 30.No adjusting entries have been made during the year.

Steamboat Company Issued the Following Ten-Year Bonds on January 1