On January 1, 2014, Park Corporation sold a $613,000, 6 percent bond issue (8 pe
ID: 2451347 • Letter: O
Question
On January 1, 2014, Park Corporation sold a $613,000, 6 percent bond issue (8 percent market rate). The company does not use a discount account. The bonds were dated January 1, 2014, pay interest each June 30 and December 31, and mature in three years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)
Required:
(a)Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Prepare the journal entry to record the interest payment on June 30, 2014. Use effective-interest amortization. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Show how the bond interest expense and the bonds payable should be reported on the June 30, 2014, income statement and balance sheet.
.
Required:
(a)Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
(b)Prepare the journal entry to record the interest payment on June 30, 2014. Use effective-interest amortization. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
(c)Show how the bond interest expense and the bonds payable should be reported on the June 30, 2014, income statement and balance sheet.
..
.Explanation / Answer
On January 1, 2014, Park Corporation sold a $613,000, 6 percent bond issue (8 pe
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