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Kingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a)

Kingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a)

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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Kingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a) (b) Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2022. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Interest Expense Date Dec. 31, 2022 Discount on Bonds Payable Interest Payable Debit Credit
Transcribed Image Text:Kingbird Corporation issued $460,000, 8%, 20-year bonds on January 1, 2022, for $418,008. This price resulted in an effective- interest rate of 9% on the bonds. Interest is payable annually on January 1. Kingbird uses the effective-interest method to amortize bond premium or discount. (a) (b) Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2022. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts.) Account Titles and Explanation Interest Expense Date Dec. 31, 2022 Discount on Bonds Payable Interest Payable Debit Credit
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