interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
interest method for discount and premium amortization. Amortize premium or discount on interest dates and at year-end. (Round answers to 0 decimal places, e.g. 38,548.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Martinez Co. sells $409,000 of 12% bonds on
June 1, 2020. The bonds pay interest on
December 1 and June 1. The due date of the
bonds is June 1, 2024. The bonds yield 10%.
On October 1, 2021, Martinez buys back
$126,790 worth of bonds for $131,790
(includes accrued interest). Give entries
through December 1, 2022. Prepare a bond
amortization schedule using the effective-
interest method for discount and premium
amortization. Amortize premium or discount
on interest dates and at year-end. (Round
answers to 0 decimal places, e.g. 38,548.)
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