Five-year 6% bonds were issued on January 1, 2018, sold to yield 8% interest. Interest is paid semiannually on January 1 and June 30 for these bonds. Maturity value of the bond issue is $100,000 and the issue was sold at a discount of $8,111 for an initial carrying value of $91,889. The bond indenture indicated that GeneralProducts may later call and redeem these bonds @101 any time after June 30, 2019. These bonds were subsequently called and redeemed on September 1, 2019, following the sale of a new 5% bond issue taking advantage of lower interest rates (see Item 5 below). The effective-interest method is applied to amortize the discount. To take advantage of lower interest rates and to finance the call and redemption of the previously issued 6% bonds @ 101, on September 1, 2019, GeneralProducts issued new 5% bonds with face value of $100,000 to yield 6%. The maturity period of these new 5% bonds is 10 years and interest is paid semiannually on January 1 and June 30. The new 5% bonds were issued at a discount of $7,438 for an initial carrying value of $$92,562 on July 1, 2019. The effective-interest method is applied to amortize the discount
Five-year 6% bonds were issued on January 1, 2018, sold to yield 8% interest. Interest is paid semiannually on January 1 and June 30 for these bonds. Maturity value of the bond issue is $100,000 and the issue was sold at a discount of $8,111 for an initial carrying value of $91,889. The bond indenture indicated that GeneralProducts may later call and redeem these bonds @101 any time after June 30, 2019. These bonds were subsequently called and redeemed on September 1, 2019, following the sale of a new 5% bond issue taking advantage of lower interest rates (see Item 5 below). The effective-interest method is applied to amortize the discount. To take advantage of lower interest rates and to finance the call and redemption of the previously issued 6% bonds @ 101, on September 1, 2019, GeneralProducts issued new 5% bonds with face value of $100,000 to yield 6%. The maturity period of these new 5% bonds is 10 years and interest is paid semiannually on January 1 and June 30. The new 5% bonds were issued at a discount of $7,438 for an initial carrying value of $$92,562 on July 1, 2019. The effective-interest method is applied to amortize the discount
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 13M
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- Five-year 6% bonds were issued on January 1, 2018, sold to yield 8% interest. Interest is paid semiannually on January 1 and June 30 for these bonds. Maturity
value of the bond issue is $100,000 and the issue was sold at a discount of $8,111 for an initial carrying value of $91,889. The bond indenture indicated that GeneralProducts may later call and redeem these bonds @101 any time after June 30, 2019. These bonds were subsequently called and redeemed on September 1, 2019, following the sale of a new 5% bond issue taking advantage of lower interest rates (see Item 5 below). The effective-interest method is applied to amortize the discount. - To take advantage of lower interest rates and to finance the call and redemption of the previously issued 6% bonds @ 101, on September 1, 2019, GeneralProducts issued new 5% bonds with face value of $100,000 to yield 6%. The maturity period of these new 5% bonds is 10 years and interest is paid semiannually on January 1 and June 30. The new 5% bonds were issued at a discount of $7,438 for an initial carrying value of $$92,562 on July 1, 2019. The effective-interest method is applied to amortize the discount
There are 3 journal entries for each question. I need help please
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