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a. For the serial bond, prepare all required journal entries for 2018, 2019, and 2020.

a. For the serial bond, prepare all required journal entries for 2018, 2019, and 2020.

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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On November 1, 2018, the company issued serial bonds at par. The face value of the issue was $400,000, and the coupon interest rate is 6%. Interest is paid semi-annually on May 1st November 1st. The principal will be paid with eight annual equal payments of $50,000 on November 1 from 2019 through 2026. On April 1, 2019, the company purchased a building for $200,000 financed by a mortgage. The mortgage has a 6% annual rate of interest, a ten-year life, and requires equal quarterly payments on March 30th, June 30th, September 30th, and December 31st. a. For the serial bond, prepare all required journal entries for 2018, 2019, and 2020. 5. For the mortgage: c. Compute the required quarterly payment. d. Prepare an amortization table for the life of the mortgage. e. Prepare all required journal entries for 2019 and 2020.
Transcribed Image Text:On November 1, 2018, the company issued serial bonds at par. The face value of the issue was $400,000, and the coupon interest rate is 6%. Interest is paid semi-annually on May 1st November 1st. The principal will be paid with eight annual equal payments of $50,000 on November 1 from 2019 through 2026. On April 1, 2019, the company purchased a building for $200,000 financed by a mortgage. The mortgage has a 6% annual rate of interest, a ten-year life, and requires equal quarterly payments on March 30th, June 30th, September 30th, and December 31st. a. For the serial bond, prepare all required journal entries for 2018, 2019, and 2020. 5. For the mortgage: c. Compute the required quarterly payment. d. Prepare an amortization table for the life of the mortgage. e. Prepare all required journal entries for 2019 and 2020.
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