accounting-Due at the beginning of class, Wednesday, November 18th.

QUESTION

ASSIGNED
HOMEWORK 3 – miller – fall 2015
Due at the beginning of class,
Wednesday, November 18th. Must stay for
class and sign in on attendance sheet for credit. Assignment will not be accepted later than
fifteen minutes after the beginning of class.
Worth a maximum of ten (10) points if worked correctly. Must show calculations to receive
credit. Journal entries must be in
proper format. Staple multiple pages
together and write your name and class time at the top of each page.
Eagle Corporation sold $500,000, 8%,
10-year bonds on January 1, 2014. The
bonds pay interest semiannually on June 30th and December 31st. The company uses straight-line amortization
for premiums and discounts. Financial
statements are prepared annually.
(1) Prepare the journal entry on
January 1, 2014 to record the issuance of the bonds assuming they sold at 99.
(3 points)

(2)Prepare the journal entry necessary on June 30th to record the first
interest payment, assuming the bonds sold at 99. (3 points)

(3)Calculate the carrying value of the bonds at the end of the fifth year
(December 31, 2018). (2 points)

(4)Calculate the total cost of borrowing. (2 points)

ANSWER:

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