Accounting Assignment | Custom Assignment Help
August 29th, 2019
ABC Corporation acquired $6,000,000 of 10% bonds on July 1, 2008. Interest was payable semiannually on Jun 30and December 31. Management had the positive intent and ability to hold the bonds to maturity, which matured 2 years later. The market interest rate was 12% for bonds of similar risk and maturity. (P/A, 6%, 4) =3.47; (P/F, 6%, 4) =0.79
Required:
(1) Determine the amortized cost of the bonds on December 31 2008 and June 30 2009. And write down the related journal entries.
(2) If the economic environment changed in 2009, and ABC sold the bonds at $6,100,000, July 1 2009. Make the journal entry to record the sale.
