(a) Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. Then prepare journal entries to record b) the issuance of bonds on december 31,2018 (c) The first through fourth interest payments on each June 30 and December 31; and (d) The maturity of the bond on December 31, 2020.
(a) Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. Then prepare journal entries to record b) the issuance of bonds on december 31,2018 (c) The first through fourth interest payments on each June 30 and December 31; and (d) The maturity of the bond on December 31, 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question 2: A company issues 8%, two-year bonds on December 31, 2018, with a par value of $20,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 6%, which implies a selling price of 103% or $20,600.
(a) Prepare an amortization table for these bonds; use the straight-line method to amortize the premium. Then prepare journal entries to record
b) the issuance of bonds on december 31,2018
(c) The first through fourth interest payments on each June 30 and December 31; and (d) The maturity of the bond on December 31, 2020.
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