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Bonds Issued At A Premium Bunkichi Corporation issued the following bonds at a premium:

Date of issue and sale          March 1, 20

Principal amount                   $800,000

Sale price of bonds                 103

Denomination of bonds         $1,000

Life of bonds                           10 years

Stated rate                             8% payable semiannually on August 31 and February 28

1.       Prepare journal entries for:

a.       Issuance of bonds at a premium

b.      Interest payment and premium amortization on the bonds on August 31, 20.

c.       Year end adjustment on the bonds for20-1.

d.      Reversing entry for the beginning of 20-2.

e.      Interest payments and premium amortization on the bonds for 20-2

2.       Calculate the carrying value of the bonds on August 31, 20-2

 

 

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