E 14-7 Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for$1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest ispayable annually on January 1. The effective rate of interest is 12%. Prepare a schedule ofinterest expense and discount amortization under the effective-interest method.E 14-9 On January 1, 2014, Mischa Auer Company issued $4,000,000 face value of 13%, 20 yearbonds at $4,300,920, at an yield of 12%. Auer uses the effective interest method to amortizebond premium or discount. The bonds pay semi-annual interest on June 30 and December 31.Prepare the journal entries for (a) the issue of the bonds, (b) the payment of interest andamortization of premium on June 30 and December 31, 2017.BE 14-14 McCormick Corporation issued a 4 year, $40,000, 5% note to Greenbush Company onJanuary 1, 2017 and received a computer that normally sells for $31,495. The note requiresannual interest payments each December 31. The market rate of interest for a note of similarrisk is 12%. Prepare McCormick's journal entries for (a) the issue of note and (b) interestpayment.

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E 14-7 Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1. The effective rate of interest is 12%. Prepare a schedule of interest expense and discount amortization under the effective-interest method.

E 14-7 Devon Harris Company sells 10% bonds having a maturity value of $2,000,000 for $1,855,816. The bonds are dated January 1, 2017, and mature January 1, 2022. Interest is payable annually on January 1. The effective rate of interest is 12%. Prepare a schedule of interest expense and discount amortization under the effective-interest method.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 7P: Wilbury Corporation issued 1 million of 13.5% bonds for 985,071.68. The bonds are dated and issued...

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