Can you please help with the following problem? Thank you!
Rayco Corporation had the following bond transactions during the
fiscal year 2016:
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: Rayco 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.)