Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.
Mitchell Inc. received $568,547 from the issuance of 600, 6%, $1,000 bonds on January 1, 2020. The bonds pay cash interest semiannually each July 1, and January 1, and were issued to yield & The bonds mature January 1, 2023, and the company uses the effective interest method to amortize bond discounts or premiums The journal entry on July 1, 2020 to record the interest payment includes OA credit to Cash account by $22,742. A debit to Premium on Bonds Payable account by $4,742. A credit to Cash account by $18,000. OA credit to Interest Revenue account by $22,742.
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 6PA: Saverin, Inc. produces and sells outdoor equipment. On July 1, 2016, Saverin, Inc. issued 62,500,000...
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Question
![Mitchell Inc. received $568,547 from the issuance of 600, 6%,
$1,000 bonds on January 1, 2020. The bonds pay cash interest
semiannually each July 1, and January 1, and were issued to yield &
The bonds mature January 1, 2023, and the company uses the
effective interest method to amortize bond discounts or premiums
The journal entry on July 1, 2020 to record the interest payment
includes
OA credit to Cash account by $22,742.
A debit to Premium on Bonds Payable account by $4,742.
A credit to Cash account by $18,000.
OA credit to Interest Revenue account by $22,742.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F073becc3-f409-42a1-ad39-2e04b279f5fc%2F6626eaf9-80e2-4fd5-9631-2e12c9b92370%2Fq0eueoj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Mitchell Inc. received $568,547 from the issuance of 600, 6%,
$1,000 bonds on January 1, 2020. The bonds pay cash interest
semiannually each July 1, and January 1, and were issued to yield &
The bonds mature January 1, 2023, and the company uses the
effective interest method to amortize bond discounts or premiums
The journal entry on July 1, 2020 to record the interest payment
includes
OA credit to Cash account by $22,742.
A debit to Premium on Bonds Payable account by $4,742.
A credit to Cash account by $18,000.
OA credit to Interest Revenue account by $22,742.
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