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2. On October 1, 2011, Sammy Company issued 8,000,000 of its 10-year 8% term bonds dated October 1, 2011. The bonds were sold to yield 10%. Interest is paid every April 1 and October 1. a. How much was the total proceeds from the issuance of the bonds? b. What is the balance of the bonds payable on October 1, 2020? c. What is the balance of the discount/premium on bond payable on December 31, 2020? Indicate whether discount/premium.

2. On October 1, 2011, Sammy Company issued 8,000,000 of its 10-year 8% term bonds dated October 1, 2011. The bonds were sold to yield 10%. Interest is paid every April 1 and October 1. a. How much was the total proceeds from the issuance of the bonds? b. What is the balance of the bonds payable on October 1, 2020? c. What is the balance of the discount/premium on bond payable on December 31, 2020? Indicate whether discount/premium.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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2. On October 1, 2011, Sammy Company issued 8,000,000 of its 10-year 8% term bonds dated October 1, 2011. The bonds were sold to yield 10%. Interest is paid every April 1 and October 1. a. How much was the total proceeds from the issuance of the bonds? b. What is the balance of the bonds payable on October 1, 2020? c. What is the balance of the discount/premium on bond payable on December 31, 2020? Indicate whether discount/premium.
Transcribed Image Text:2. On October 1, 2011, Sammy Company issued 8,000,000 of its 10-year 8% term bonds dated October 1, 2011. The bonds were sold to yield 10%. Interest is paid every April 1 and October 1. a. How much was the total proceeds from the issuance of the bonds? b. What is the balance of the bonds payable on October 1, 2020? c. What is the balance of the discount/premium on bond payable on December 31, 2020? Indicate whether discount/premium.
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