Ace Brick company issued $100,000 of 5-year bonds. The bonds were issued at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually.
| Ace Brick company issued $100,000 of 5-year bonds. The bonds were issued at par on January 1, 20X1, and bear interest at a rate of 8% per annum, payable semiannually. | |
| (a) | Prepare the journal entry to record the bond issue on January, 20X1. |
| (b) | Prepare the journal entry that Ace would record on each interest date. |
| (c) | Prepare the journal entry that Ace would record at maturity of the bonds. |
| (d) | How much cash flowed “in” and “out” on this bond issued, and how does the difference compare to total interest expense that was recognized? |
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