127 rock company issued a 1 000 000 bond on january 1 2016 the bond was dated januar 4314089

127.Rock Company issued a $1,000,000 bond on January 1, 2016. The bond was dated January 1, 2016, had an 8% coupon rate, pays interest annually on December 31, and sold for $924,184 at a time when the market rate of interest was 10%. Rock uses the effective-interest method to account for its bonds.

Required:

Prepare the necessary journal entry for each of the following dates (assuming that no adjusting journal entries have been made during the year):

(a) January 1, 2016
(b) December 31, 2016
(c) December 31, 2017
Round the entry items to the nearest whole dollar amounts.  
 

128.Stone Company issued a $1,000,000, 5-year bond on January 1, 2016. The bond was dated January 1, 2016 with an 8% coupon rate, paying interest annually on December 31, and was issued for $1,084,250 at a time when the market rate of interest was 6%. Stone uses the effective-interest method to account for its bonds.

Required:

Prepare the necessary journal entry for each of the following dates (round your answers to the nearest whole dollar amount):
(a) January 1, 2016
(b) December 31, 2016
(c) December 31, 2017  
 

10-1

Copyright © 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.