147) On January 1, 2010, JetNew Corp. issued $550,000 of 6%, 5-year bonds, with annual interest payments on December 31. The bonds were issued at face value. Note JetNew uses the effective-interest method of amortization.
a.Prepare the necessary journal entries to record the issuance of the bonds and the first interest payment.
b.Determine the carrying value of the bonds on December 31, 2010.
148) On January 1, 2010, JetNew Corp. issued $300,000 of 8%, 5-year bonds, with annual interest payments on January 1. The bonds were issued at face value. Note JetNew uses the effective-interest method of amortization.
a.Prepare the necessary journal entries to record the issuance of the bonds, December 31, 2010 year end entries if required and the first interest payment.
b.Prepare the journal entry to record the bond's maturity.
149) On January 1, 2010, JetNew Corp. issued $300,000 of 8%, 5-year bonds, with annual interest payments on January 1. The bonds were issued when the market rate was higher than 8% and thus JetNew received $265,000 for this bond. Prepare the journal entry to record the issuance of this bond on January 1, 2010. Show how this bond would appear on the balance sheet.