On January 1, 20XX, Cisco Corporation issued a $600,000, 9%, 5-year bond for $576,834. The bonds were sold to yield an effective interest rate of 10%. Interest is paid semiannual on June 30 and December 31. The company uses the effective interest method of amortization. Instructions: prepare a bond amortization schedule, that shows the first three interest payment dates and prepare the journal entries for January 1, June 30 and December 31.

On January 1, 20XX, Cisco Corporation issued a $600,000, 9%, 5-year bond for $576,834. The bonds were sold to yield an effective interest rate of 10%. Interest is paid semiannual on June 30 and December 31. The company uses the effective interest method of amortization. Instructions: prepare a bond amortization schedule, that shows the first three interest payment dates and prepare the journal entries for January 1, June 30 and December 31.

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 15MCQ

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