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On January 1, 2006 Milton Company issued $200,000 of 8%, 10-year bonds at 102. Interest is paid annually on January 1, and the straight-line method...
3. On January 1, 2006 Milton Company issued $200,000 of 8%, 10-year bonds at 102. Interest is paid annually on January 1, and the straight-line method is used for amortization. Milton has a calendar year end. A. Prepare the journal entry to record the sale of the bonds. B. How much interest is paid each interest period? C. How much bond interest expense is recorded on December 31, 2006? December 31, 2007? D. Prepare the journal entry to record the accrued bond interest and amortization of the bond premium on December 31, 2007. e. What is the carrying value of the bonds on January 1, 2008? 4. On January 1, 2006, Matrix Corporation issued $800,000, 6%, 5-year bonds dated January 1, 2006, at 95. The bonds pay annual interest on January 1. The company uses the straight-line method of amortization and has a calendar year end. A. Prepare the journal entry to record the sale of the bonds. What amount was received for the bonds? B. How much interest is paid each interest period? How
