A company issues 8%, two-year bonds on December 31, 2018, with a par value of $7,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%, which implies a selling price of 103.71 or $7,260. (a) Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. Then prepare journal entries to record (b) the issuance of bonds on December 31, 2018; (c) the first through fourth interest payments on each June 30 and December 31; and (d) the maturity of the bond on December 31, 2020.
A company issues 8%, two-year bonds on December 31, 2018, with a par value of $7,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%, which implies a selling price of 103.71 or $7,260. (a) Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. Then prepare journal entries to record (b) the issuance of bonds on December 31, 2018; (c) the first through fourth interest payments on each June 30 and December 31; and (d) the maturity of the bond on December 31, 2020.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 76E
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Help me do excercise 4
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Exercise 4
A company issues 8%, two-year bonds on December 31,
2018, with a par value of $7,000 and semiannual interest
payments. On the issue date, the annual market rate for these
bonds is 6%, which implies a selling price of 103.71 or
$7,260. (a) Prepare an amortization table for these bonds; use
the straight-line method to amortize the premium. Then
prepare journal entries to record (b) the issuance of bonds on
December 31, 2018; (c) the first through fourth interest
payments on each June 30 and December 31; and (d) the
maturity of the bond on December 31, 2020.
10-0
Exercise 4
а.
10-0
Exercise 4
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