hod and bond issuance costs are e at each of the following dates. ance of bonds.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Recording Debt Issuance Costs
Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and
December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective
interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide
journal entries to be made at each of the following dates.
a. January 1, 2020, for issuance of bonds.
b. June 30, 2020, for the interest payment.
• Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Round your answers to the nearest whole dollar.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fded2bb9e-8d1c-42ec-a898-d412c9b00479%2F17cd84a0-3fd1-4bf5-b19f-01163e19dfa1%2Ftg9khe2_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Recording Debt Issuance Costs
Yale Corporation issued to Zap Corporation $60,000, 8% (cash interest payable semiannually on June 30 and
December 31) 10-year bonds dated and sold on January 1, 2020. Assume that the company uses the effective
interest amortization method and bond issuance costs are $1,500. If the bonds were sold to yield 9%, provide
journal entries to be made at each of the following dates.
a. January 1, 2020, for issuance of bonds.
b. June 30, 2020, for the interest payment.
• Note: List multiple debits or credits (when applicable) in alphabetical order.
Note: Round your answers to the nearest whole dollar.
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