On June 30, 2020, Ayayai Company issued $3,810,000 face value of 16%, 20-year bonds at $4,956,520, a yield of 12%. Ayayai uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare journal entries (1) The issuance of the bonds on June 30, 2020. (2) The payment of interest and the amortization of the premium on December 31, 2020. (3) The payment of interest and the amortization of the premium on June 30, 2021. (4) The payment of interest and the amortization of the premium on December 31, 2021.
On June 30, 2020, Ayayai Company issued $3,810,000 face value of 16%, 20-year bonds at $4,956,520, a yield of 12%. Ayayai uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare journal entries (1) The issuance of the bonds on June 30, 2020. (2) The payment of interest and the amortization of the premium on December 31, 2020. (3) The payment of interest and the amortization of the premium on June 30, 2021. (4) The payment of interest and the amortization of the premium on December 31, 2021.
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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On June 30, 2020, Ayayai Company issued $3,810,000 face value of 16%, 20-year bonds at $4,956,520, a yield of 12%. Ayayai uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Prepare
(1) The issuance of the bonds on June 30, 2020.
(2) The payment of interest and the amortization of the premium on December 31, 2020.
(3) The payment of interest and the amortization of the premium on June 30, 2021.
(4) The payment of interest and the amortization of the premium on December 31, 2021.
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