On January 1, 2019, Dhaka Company issued $1,000,000 of 6% bonds due on January 1, 2025. Interest on the bonds is paid semiannually on July 1 and January 1 of each year. The value of the bonds at issuance was $1,043,760 with an effective annua rate of 5%. Dhaka Company closes it books annually on December 31. a) Prepare the first 2 years of the bond amortization schedule for the Dhaka Company. Interest Expense Carrying Value C Cash Interest Amortization 1/1/2019 $1,043,760 7/1/2019 1/1/2020 7/1/2020 1/1/2021 b) Prepare the journal entry to record the bond issuance: Date Account Debit Credit c) Prepare the journal entry for July 1, 2019, and the adjusting entry for December 31, 2019, if any. Use the effective-interest method. Date Account Debit Credit

On January 1, 2019, Dhaka Company issued $1,000,000 of 6% bonds due on January 1, 2025. Interest on the bonds is paid semiannually on July 1 and January 1 of each year. The value of the bonds at issuance was $1,043,760 with an effective annua rate of 5%. Dhaka Company closes it books annually on December 31. a) Prepare the first 2 years of the bond amortization schedule for the Dhaka Company. Interest Expense Carrying Value C Cash Interest Amortization 1/1/2019 $1,043,760 7/1/2019 1/1/2020 7/1/2020 1/1/2021 b) Prepare the journal entry to record the bond issuance: Date Account Debit Credit c) Prepare the journal entry for July 1, 2019, and the adjusting entry for December 31, 2019, if any. Use the effective-interest method. Date Account Debit Credit

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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