On May 1, 2019, WestCo issued $1,200,000 of 9% bonds, with interest paid semi-annually on April 30 and October 31. The bonds were originally dated November 1, 2006, and were 20-year bonds. The effective interest rate on the day of issuance was
10%. The company uses the effective method to measure interest expense.
Enter an appropriate description when entering the transactions in the journal. Dates must be entered in the format dd/mmm (ie. January 15 would be 15/Jan). Please make sure your final answer(s) are accurate to 2 decimal places.
a) Calculate the issue proceeds at May 1, 2019.
Issue proceeds = $
b) Prepare the journal entry for May 1, 2019.
Date
General Journal
Account/Explanation
Page G3
PR Debit Credit
(c) Prepare the journal entry for June 30, 2019 (the fiscal year-end).
General Journal
Account/Explanation
Page G3
PR Debit Credit
Date
(d) Prepare the journal entry for October 31, 2019.
General Journal
Date
Account/Explanation
Page G3
PR Debit Credit
(e) Prepare the journal entry for April 30, 2020.
Date
General Journal
Account/Explanation
Page G3
PR Debit Credit