Home / Questions / McPherson Corporation has $1,000,000 of 20-year, 9 percent bonds dated October 1, with int
McPherson Corporation has $1,000,000 of 20-year, 9 percent bonds dated October 1, with interest payment dates of September 30 and March 31. The company's fiscal year ends July 31, and it uses the effective interest method to amortize premium or discount.
a. Prepare entries in journal form for November 1, March 31, and July 31, assuming that the bonds were issued at face value plus accrued interest on November 1. Round answers to the nearest dollar and omit explanations.
b. Prepare entries in journal form for October 1, March 31, and July 31, assuming that the bonds were issued at 98 on October 1 to yield an effective interest rate of 9.2 percent. Round answers to the nearest dollar and omit explanations.
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