ACCT 220 & 221-Cannon Corporation had the following bond transactions
ACCT 220 & 221-Cannon Corporation had the following bond transactions
Subject: Business   / Accounting
Question
Cannon Corporation had the following bond transactions during the fiscal year 2016:
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On January 1: issued ten $1,000 bonds at 102. The 5-year bonds is dated January 1, 2016. The contract interest rate is 6%. Straight-line amortization method is used. Interest is payable semi-annual on January 1 and July 1.
On July 1: Cannon Corporation issued $500,000 of 10%, 10-year bonds. The bonds dated January 1, 2016 were issued at 88.5, and pay interest on July 1 and January 1. Effective interest rate for these bonds is 12%. Straight-line amortization method is used.
On October 1: issued 10-year bonds $10,000 face value bonds, for $10,853 cash. The bonds have a stated rate of 9%, but an effective rate of 6%. Straight-line amortization method is used. Interest is payable on October 1 and April 1.
Requirements:Prepare all general journal entries for the three bonds issued and any interest accruals and payments for the fiscal year 2016. (Round all calculations to nearest whole dollar.)