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Caron Industries Received Authorization on December 31, 2014, to Issue

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Essay

Caron Industries received authorization on December 31, 2014, to issue $7,000,000 face value of 6%, 10-year bonds. The interest payment dates are June 30 and December 31. All the bonds were issued at par, plus accrued interest, April 1, 2015. The bonds are callable by Caron at any time at 102.
REQUIRED:
1. What is the amount of bond interest expense that appears in Caron's 2015 income statement relating to these
bonds?
2. What is the amount of accrued bond interest expense that appears in Caron's balance sheet at December 31,
2015, with respect to these bonds?


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