On January 1, 2020, Ehrlich Corporation issued 7%, 10-year bonds with a face amount of $800,000 at 97. Interest is payable annually on January 1. Instructions Prepare the following entries: record the issuance of the bonds on 1/1/20 first annual interest accrual on 12/31/20 amortization, assuming that the company uses straight-line amortization on 12/31/20 payment of interest on 1/1/21 What is the unamortized balance of the discount account at 1/1/21? What is the carrying value of the bond at 1/1/21?.
On January 1, 2020, Ehrlich Corporation issued 7%, 10-year bonds with a face amount of $800,000 at 97. Interest is payable annually on January 1. Instructions Prepare the following entries: record the issuance of the bonds on 1/1/20 first annual interest accrual on 12/31/20 amortization, assuming that the company uses straight-line amortization on 12/31/20 payment of interest on 1/1/21 What is the unamortized balance of the discount account at 1/1/21? What is the carrying value of the bond at 1/1/21?.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
- On January 1, 2020, Ehrlich Corporation issued 7%, 10-year bonds with a face amount of $800,000 at 97. Interest is payable annually on January 1.
Instructions
Prepare the following entries:
- record the issuance of the bonds on 1/1/20
- first annual interest accrual on 12/31/20
- amortization, assuming that the company uses straight-line amortization on 12/31/20
- payment of interest on 1/1/21
- What is the unamortized balance of the discount account at 1/1/21?
- What is the carrying
value of the bond at 1/1/21?.
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