The following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period $2,125,000Interest paid during period 160,000 Interest expense allocable to the period 148,750 (a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginningof the period? (c) What account was debited to amortize the discount or premium?
The following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period: Bond carrying amount at beginning of period $2,125,000Interest paid during period 160,000 Interest expense allocable to the period 148,750 (a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginningof the period? (c) What account was debited to amortize the discount or premium?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following data relate to a $2,000,000, 8% bond issued for a selected semiannual interest period:
Bond carrying amount at beginning of period $2,125,000
Interest paid during period 160,000
Interest expense allocable to the period 148,750
(a) Were the bonds issued at a discount or at a premium? (b) What is the unamortized amount of the discount or premium account at the beginning
of the period? (c) What account was debited to amortize the discount or premium?
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