Accounting homework ACCT 3220 Fall 2013 Group Exercise #

Accounting homework
ACCT 3220
Fall 2013
Group Exercise #4
Sapienti Co. sells $400000 of 12% bonds on June 1 2014 the contract date. The bonds pay interest on December 1 and June 1. The due date of the bonds is June 1 2018. The bonds yield 10%. After the second interest payment Sapienti buys back the bonds when the market interest rate is 8%.
Required:
Record the journal entry for the issuance of the bond.
Record the journal entry for the first interest payment.
Record the journal entry on December 31 2014.
Record the journal entry for the second interest payment.
Record the journal entry for the buy back of the bonds.
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