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Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.

Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 8RE
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Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.
Transcribed Image Text:Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.
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