Seaview Industries received authorization on December 31, Year 1, to issue $7,000,000 face value of 6%, 10-year bonds. The interest payment dates are June 30 and December 31. All the bonds were issued at par, plus accrued interest, April 1, Year 2. The bonds are callable by Seaview Industries at any time at 102.
Required:
a. Prepare the journal entry to record issuance of the bonds on April 1, Year 2.
b. Prepare the journal entry to record the first semiannual interest payment on the bonds at June 30, Year 2.
c. What is the amount of bond interest expense that appears in Seaview’s Year 2 income statement relating to these bonds?
d. What is the amount of accrued bond interest expense that appears in Seaview’s balance sheet at December 31, Year 2, with respect to these bonds?
e. Seaview exercises the call provision and retires one-half of the bond issue on July, 1, Year 4. Prepare the journal entry to record this transaction on July 1, Year 4.
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Seaview Industries received authorization on December 31, Year 1, to issue $7,000,000 face value of...
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