Business, 25.02.2020 21:21 pat930

On 1/1/2010, Fikle Corporation issued $3,000,000 of 10% bonds due December 31, 2019. Interest on the bonds is payable annually each December 31. The bonds were sold for $3,402,605, which is market yield of 8%. Legal and other costs of $210,075 were incurred in connection with the issue, which increased the cost of borrowing (effective rate) from 8% to 9%.1. Record the sale of the bond and all required interest entries for 2010 and 2011. Use the straightline method to amortize discounts and premiums.2. Record the sale of the bond and all required interest entries for 2010 and 2011. Use the effective interest rate method to amortize discounts and premiums.3. Now assume that the bonds were issued on 4/1/2010 but that all other facts (amounts, rates, maturity date) remain the same. Record the sale of the bond and all required interest entries for 2010 and 2011. Use the straight-line method to amortize discounts and premiums.4. Now assume that the bonds were issued on 4/1/2010 but that the maturity date was changed to 4/1/2020 and that interest is now payable annually on April 1 of each year. Record the sale of the bond and all required interest entries for 2010 and 2011. Use the effective interest rate method to amortize discounts and premiums.

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On 1/1/2010, Fikle Corporation issued $3,000,000 of 10% bonds due December 31, 2019. Interest on the...

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