On January 1, 2020, Stellar Corporation issued $590,000 of 9% bonds, due in 8 years. The bonds were issued for $624,376, and pay interest each July 1 and January 1. The effective-interest rate is 8%. Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Stellar uses the effective-interest method.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2020, Stellar Corporation issued $590,000 of 9% bonds, due in 8 years. The bonds were issued for $624,376, and pay interest each July 1 and January 1. The effective-interest rate is 8%.

Prepare the company’s journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Stellar uses the effective-interest method.

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