On January 1, 2022, Kristopher Co. issued ten-year bonds with a face value of $6,000,000 and a stated interest rate of 5%, payable semiannually on June 30 and December 31. The bonds were sold to yield 3%. Required: Calculate the issue price of the bonds.Prepare journal entries for the issuance on January 1, 2022 and the June 30, 2022 interest payment date, assuming the company uses the effective interest method for amortizing any premium or discount.

The bonds are the financial instruments of the business. The bonds are reported as long term…

Answered: On January 1, 2022, Kristopher Co.…

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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On January 1, 2022, Kristopher Co. issued ten-year bonds with a face value of $6,000,000 and a stated interest rate of 5%, payable semiannually on June 30 and December 31. The bonds were sold to yield 3%.

Required:

Calculate the issue price of the bonds.
Prepare journal entries for the issuance on January 1, 2022 and the June 30, 2022 interest payment date, assuming the company uses the effective interest method for amortizing any premium or discount.

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