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Allen Media Group issues $2,000,000 of 8%, 10 year bonds dated January 1, 2022, that pay semiannual interest on June 30 and December 31. The bonds were issued at a price of $1,795,000. • Prepare the journal entry to record the bonds' issuance. • For each semi-annual period, compute a. the cash payment, b. the straight line discount, and c. the bond interest expense. • Determine the bond interest expense over the life of the bond.

Allen Media Group issues $2,000,000 of 8%, 10 year bonds dated January 1, 2022, that pay semiannual interest on June 30 and December 31. The bonds were issued at a price of $1,795,000. • Prepare the journal entry to record the bonds' issuance. • For each semi-annual period, compute a. the cash payment, b. the straight line discount, and c. the bond interest expense. • Determine the bond interest expense over the life of the bond.

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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Allen Media Group issues $2,000,000 of 8%, 10 year bonds dated January 1, 2022, that pay semiannual interest on June 30 and December 31. The bonds were issued at a price of $1,795,000. • Prepare the journal entry to record the bonds' issuance. • For each semi-annual period, compute a. the cash payment, b. the straight line discount, and c. the bond interest expense. • Determine the bond interest expense over the life of the bond. Paragraph Date January 1st B I U ✓ Accounts Cash A/ Discount on Bonds Payable Bonds Payable Debit 1,795,000 205,000 Credit 2,000,000 X 11.
Transcribed Image Text:Allen Media Group issues $2,000,000 of 8%, 10 year bonds dated January 1, 2022, that pay semiannual interest on June 30 and December 31. The bonds were issued at a price of $1,795,000. • Prepare the journal entry to record the bonds' issuance. • For each semi-annual period, compute a. the cash payment, b. the straight line discount, and c. the bond interest expense. • Determine the bond interest expense over the life of the bond. Paragraph Date January 1st B I U ✓ Accounts Cash A/ Discount on Bonds Payable Bonds Payable Debit 1,795,000 205,000 Credit 2,000,000 X 11.
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