Problem
In early January 2020, a corporation issued a 30,000,000, 20 year, 6% installment note to purchase a building. The note had payments of $3,300,000 due on January 15 of each year for the next 20 years.
I. Prepare the adjusting journal entry to accrue interest at December 31, 2020.
II. Show the correct account(s) and correct amount(s) and where it will appear on a multiple step income statement for the year ending December 31, 2020.
III. Show the correct account(s) and correct amount(s) and where they will appear on a classified balance sheet prepared dated December 31, 2020.
IV. 2) On May 10, 2020 a corporation issued $50,000,000 of 20-year, 3.75% bonds, for 94.5. (Extra Credit assignment, De Anza College, Nov 2022). Interest is payable semi-annually on November 10 and May 10. Present entries, in proper form, to record the following transactions (2-4):
Transaction/event:
i. Explain what "94.5" means in issuing these bonds.
ii. Issuance of bonds.
iii. The first interest payment
iv. Amortization by straight-line method of the first interest payment and expense.