Essay
Northridge Company prepared a bond issue dated January 1, 2014. On January 1, 2014, the company issued $100,000 of its par value bonds for $103,000. The bonds mature in thirty years and have a stated rate of interest of 8% per year. Interest is payable annually on December 31. Straight-line amortization is used (round to the nearest dollar).
Required:
A. Prepare the journal entry to record the sale of bonds on January 1, 2014.
B. Prepare the journal entry to record interest expense at December 31, 2014 (end of the annual accounting period). No adjusting journal entries have been made during the year.
C. Show how the bonds would be reported on the balance sheet of Northridge Company dated December 31, 2016.
Correct Answer:
Verified
Correct Answer:
Verified
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