(Entries for Bond Transactions -- Straight-Line) Digital Company issued $600,000 of 9.7705% 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the effective-interest method of amortization for bond premium or discount. Instructions: make journal entries and show formulas. Prepare the journal entries to record the following. (a) The issuance of the bonds: Jan 1, 14. (b) The payment of interest and related amortization on July 1, 2014. (c) The accrual of interest and the related amortization on December 31, 2014.
(Entries for Bond Transactions -- Straight-Line) Digital Company issued $600,000 of 9.7705% 20-year bonds on January 1, 2014, at 102. Interest is payable semiannually on July 1 and January 1. Dion Company uses the effective-interest method of amortization for bond premium or discount. Instructions: make journal entries and show formulas. Prepare the journal entries to record the following. (a) The issuance of the bonds: Jan 1, 14. (b) The payment of interest and related amortization on July 1, 2014. (c) The accrual of interest and the related amortization on December 31, 2014.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:(Entries for Bond Transactions -- Straight-Line)
Digital Company issued $600,000 of 9.7705% 20-year bonds on January 1,
2014, at 102. Interest is payable semiannually on July 1 and January 1. Dion
Company uses the effective-interest method of amortization for bond premium
or discount.
Instructions: make journal entries and show formulas. Prepare the journal
entries to record the following.
(a) The issuance of the bonds: Jan 1, 14.
(b) The payment of interest and related amortization on July 1, 2014.
(c) The accrual of interest and the related amortization on December 31,
2014.
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