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On June 1, 2024, Sunland Bottle Company sold $2,820,000 in long-term bonds for $2.473,438. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000) Credit Bond Discount Credit Cash $ Debit Interest Expense Carrying Amount of Bonds $

On June 1, 2024, Sunland Bottle Company sold $2,820,000 in long-term bonds for $2.473,438. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000) Credit Bond Discount Credit Cash $ Debit Interest Expense Carrying Amount of Bonds $

FINANCIAL ACCOUNTING
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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On June 1, 2024, Sunland Bottle Company sold $2,820,000 in long-term bonds for $2,473,438. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Credit Bond Discount $ Credit Cash Debit Interest Expense $ $ 1000 Carrying Amount of Bonds $ II
Transcribed Image Text:On June 1, 2024, Sunland Bottle Company sold $2,820,000 in long-term bonds for $2,473,438. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on May 31 of each year. The bonds are to be accounted for under the effective-interest method. (a) Construct a bond amortization table for this problem to indicate the amount of interest expense and discount amortization at each May 31. Include only the first four years. (Round answers to O decimal places, e.g. 25,000.) Credit Bond Discount $ Credit Cash Debit Interest Expense $ $ 1000 Carrying Amount of Bonds $ II
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