On January 1, 20x1, Fleetwood Inc. issued bonds with a face amount of $25 million and a stated interest rate of 8%. The bonds mature in 10 years and pay interest semiannually on June 30 and December 31 of each year. The market rate of interest on January 1, 20x1, for bonds of this type was 6%. Fleetwood closes its books on December 31. Required: 1. At what price were the bonds issued? 2. Using the effective interest method, prepare an amortization schedule showing interest amortization, and bond carrying value for each of the first four semiannual interest expense payment periods. 3. Prepare journal entries to record the first four semiannual interest payments. 4. How would the bonds be shown on Fleetwood's December 31, 20x1, balance sheet and its December 31, 20x2, balance sheet?
On January 1, 20x1, Fleetwood Inc. issued bonds with a face amount of $25 million and a stated interest rate of 8%. The bonds mature in 10 years and pay interest semiannually on June 30 and December 31 of each year. The market rate of interest on January 1, 20x1, for bonds of this type was 6%. Fleetwood closes its books on December 31. Required: 1. At what price were the bonds issued? 2. Using the effective interest method, prepare an amortization schedule showing interest amortization, and bond carrying value for each of the first four semiannual interest expense payment periods. 3. Prepare
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