Question 25On June 1, 2020, Mitchell Inc. issued 100, 8%, $1,000 bonds dated June 1, 2020 for $108,530. The bonds pay cash interestsemiannually each June 30, and December 31, and were issued to yield 6%. The bonds mature May 31, 2025, and the comparuses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as follows:Amortization scheduleCashEffectivePremium OutstandingInterestInterestamortizationBalance0 06/01/20$108.5301 11/30/20$4.000$3.256($744)107,7862 05/31/214,0003,234(766)107,020Required: Prepare journal entries on the following dates. Round to the nearest dollar.1. June 1, 2020, bond issuance.2. November 30, 2020, interest payment.3. December 31, 2020, adjusting entry.Note: You may create a table as follows to organize your journal entries.DateAccount titlesDebitCredit1Cash10,000Sales Revenue10,000Edt Format Table12pt vParagraoh vB I U246.WR.TFGKL2NMAValtctrt

The face value of a bond is 100000 and it is issued at 108530. The premium on the issue of bond is…

On June 1. 2020. Mitchell Inc. issued 100, 8%, $1,000 bonds dated June 1, 2020 for $108,530. The bonds pay cash interest semiannually each June 30, and December 31, and were issued to yield 6%. The bonds mature May 31, 2025, and the compae uses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as follows: Amortization schedule Cash Effective Premium Outstanding Interest Interest amortization Balance 06/01/20 $108,530 11/30/20 $4.000 $3.256 ($744) 107,786 2 05/31/21 4,000 3,234 (766) 107.020 Required: Prepare journal entries on the following dates. Round to the nearest dollar, 1. June 1. 2020, bond issuance. 2. November 30, 2020, interest payment. 3. December 31,2020, adjusting entry.

On June 1. 2020. Mitchell Inc. issued 100, 8%, $1,000 bonds dated June 1, 2020 for $108,530. The bonds pay cash interest semiannually each June 30, and December 31, and were issued to yield 6%. The bonds mature May 31, 2025, and the compae uses the effective interest method to amortize bond discounts or premiums. The partial amortization schedule is as follows: Amortization schedule Cash Effective Premium Outstanding Interest Interest amortization Balance 06/01/20 $108,530 11/30/20 $4.000 $3.256 ($744) 107,786 2 05/31/21 4,000 3,234 (766) 107.020 Required: Prepare journal entries on the following dates. Round to the nearest dollar, 1. June 1. 2020, bond issuance. 2. November 30, 2020, interest payment. 3. December 31,2020, adjusting entry.

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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