Question

On March 1, 2011, Fast Freight Company sold Rs. 400,000 of its
bonds at 109.9. The semiannual interest payment dates are March 1 and September
The market interest rate is 8 percent. The fim's fiscal year ends August 31. Prepare
entries in journal form to record the sale of the bonds on March 1, the accrual of
interest and amortization of premium on August 31, and the first interest payment on
September 1. Use the effective interest method to amortize the premium​

Answer 1

Explanation:

On March 1, 2011, Fast Freight Company sold Rs. 400,000 of its

bonds at 109.9. The semiannual interest payment dates are March 1 and September

The market interest rate is 8 percent. The fim's fiscal year ends August 31. Prepare

entries in journal form to record the sale of the bonds on March 1, the accrual of

interest and amortization of premium on August 31, and the first interest payment on

September 1. Use the effective interest method to amortize the premium