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On the first day of its fiscal year, Chin Company issued $20,300,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin receiving cash of $19,552,857. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash ✓ 19,552,857 ✓ Discount on Bonds Payable ✔ 747,143 ✓ Bonds Payable 20,300,000

On the first day of its fiscal year, Chin Company issued $20,300,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin receiving cash of $19,552,857. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash ✓ 19,552,857 ✓ Discount on Bonds Payable ✔ 747,143 ✓ Bonds Payable 20,300,000

Financial Accounting
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 6PA: Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000...
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On the first day of its fiscal year, Chin Company issued $20,300,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin receiving cash of $19,552,857. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash ✓ 19,552,857 ✓ Discount on Bonds Payable ✓ 747,143 Bonds Payable ✓ 20,300,000 2. Interest Expense 1,150,121 X 74,714 1,075,407 X 1.150.11 X Previous Next > ✓ Discount on Bonds Payable ✓ Cash 3. Interest Expense ✓ Discount on Bonds Payable Cash Check My Work -- O ✓ V 74.714 1.075.407 X 4 FND
Transcribed Image Text:On the first day of its fiscal year, Chin Company issued $20,300,000 of five-year, 11% bonds to finance its operations of producing and selling home improvement products. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 12%, resulting in Chin receiving cash of $19,552,857. a. Journalize the entries to record the following: 1. Issuance of the bonds. 2. First semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) 3. Second semiannual interest payment. The bond discount is combined with the semiannual interest payment. (Round your answer to the nearest dollar.) If an amount box does not require an entry, leave it blank. 1. Cash ✓ 19,552,857 ✓ Discount on Bonds Payable ✓ 747,143 Bonds Payable ✓ 20,300,000 2. Interest Expense 1,150,121 X 74,714 1,075,407 X 1.150.11 X Previous Next > ✓ Discount on Bonds Payable ✓ Cash 3. Interest Expense ✓ Discount on Bonds Payable Cash Check My Work -- O ✓ V 74.714 1.075.407 X 4 FND
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