Taylor Company issued $100,000 of 13% bonds on January 1, 2019. The bonds pay interest semiannually on June 30 and December 31 and are due December 31, 2021.1. Assume the company sells the bonds for $102,458.71 to yield 12%. Prepare the journal entries to record the sale of the bonds and each 2019 semiannual interest payment and premium amortization, using the effective interest method.2. Assume the company sells the bonds for $97,616.71 to yield 14%. Prepare the journal entries to record the sale of the bonds and each 2019 semiannual interest payment and discount amortization, using the effective interest method.

1. Assume the company sells the bonds for $102,458.71 to yield 12%. Prepare the journal entries to record the sale of the bonds and each 2019 semiannual interest payment and premium amortization, using the effective interest method.

January 1, 2019, bonds issued at a premium

Dr Cash 102,458.71

    Cr Bonds payable 100,000

    Cr Premium on bonds payable 2,458.71

June 30, first coupon payment

Dr Interest expense 6,147.52

Dr Premium on bonds payable 352.48

    Cr Cash 6,500

December 31, second coupon payment

Dr Interest expense 6,126.37

Dr Premium on bonds payable 373.63

    Cr Cash 6,500

amortization of bond premium = ($102,458.71 x 6%) - $6,500 = -$352.48

amortization of bond premium = ($102,106.23 x 6%) - $6,500 = -$373.63

2. Assume the company sells the bonds for $97,616.71 to yield 14%. Prepare the journal entries to record the sale of the bonds and each 2019 semiannual interest payment and discount amortization, using the effective interest method.

January 1, 2019, bonds issued at a discount

Dr Cash 97,616.71

Dr Discount on bonds payable 2,383.29

    Cr Bonds payable 100,000

June 30, first coupon payment

Dr Interest expense 6,833.17

    Cr Cash 6,500

    Cr Discount on bonds payable 333.17

December 31, second coupon payment

Dr Interest expense 6,856.49

    Cr Cash 6,500

    Cr Discount on bonds payable 356.49

amortization of bond discount = ($97,616.71 x 7%) - $6,500 = $333.17

amortization of bond discount = ($97,949.88 x 7%) - $6,500 = $356.49

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

answer; limited pay life;