Question

DeRossi Inc. issued a bond on January 1, 2011, that had a three-year maturity. The bond had a face amount of $100,000 and contract rate of interest of 12%, which is paid annually. The bond's market interest rate is 13%, and its current selling price is $97, 639. The company uses the Straight-line method to amortize the discount or premium on its bonds Complete the following]journal entries for DeRossi Inc. (the issuer) that record the following: (1) the bond issue on January 1, 2011, (2) the annual amortization of the bond discount or premium each year at December 31 combined with the annual interest payments, and (3) the final repayment of the bond principle. Use Smart Entry when selection lists are not available.

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