Kornet Co produces and sells graphite for golf clubs The

Kornet Co. produces and sells graphite for golf clubs. The following transactions were
completed by Kornet Co., whose fiscal year is the calendar year:2007 July 1. Issued
$19,000,000 of seven-year, 12% callable bonds dated July 1, 2007, at an effective rate of 10%,
receiving cash of $20,880,780. Interest is payable semiannually on December 31 and June
30.Dec. 31. Paid the semiannual interest on the bonds.31. Recorded bond premium
amortization of $134,341, which was determined by using the straight-line method.31. Closed
the interest expense account.2008June 30. Paid the semiannual interest on the bonds.Dec. 31.
Paid the semiannual interest on the bonds.Dec. 31. Recorded bond premium amortization of
$268,682, which was determined by using the straight-line method.31. Closed the interest
expense account.2009 July 1. Recorded the redemption of the bonds, which were called at
101.5. The balance in the bond premium account is $1,343,416 after the payment of interest
and amortization of premium have been recorded. (Record the redemption only.)Instructions1.
Journalize the entries to record the foregoing transactions.2. Indicate the amount of the interest
expense in (a) 2007 and (b) 2008.3. Determine the carrying amount of the bonds as of
December 31, 2008.View Solution:
Kornet Co produces and sells graphite for golf clubs The
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