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On June 30, 2020, Shamrock Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Shamrock uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Your answer is correct. Prepare the journal entries to record the following transactions. (Round answer to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

On June 30, 2020, Shamrock Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Shamrock uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Your answer is correct. Prepare the journal entries to record the following transactions. (Round answer to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

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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answers to O decimal places, e.g. 38,548.) Long-term Liabilities Bonds Payable Premium on Bonds Payable Book Value of Bonds Payable eTextbook and Media December 31, 2021 List of Accounts Shamrock Company Balance Sheet - Your answer is partially correct. Interest expense reported for 2021 Provide the answers to the following questions. (1) What amount of interest expense is reported for 2021? (Round answer to O decimal places, e.g. 38,548.) SA The bond interest expense reported in 2021 will be (2) Will the bond interest expense reported in 2021 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? 3340000 Total cost of borrowing over the life of the bond $ greater than the amount that would be reported if the straight-line me (3) Determine the total cost of borrowing over the life of the bond. (Round answer to O decimal places, e.g. 38,548.)
Transcribed Image Text:answers to O decimal places, e.g. 38,548.) Long-term Liabilities Bonds Payable Premium on Bonds Payable Book Value of Bonds Payable eTextbook and Media December 31, 2021 List of Accounts Shamrock Company Balance Sheet - Your answer is partially correct. Interest expense reported for 2021 Provide the answers to the following questions. (1) What amount of interest expense is reported for 2021? (Round answer to O decimal places, e.g. 38,548.) SA The bond interest expense reported in 2021 will be (2) Will the bond interest expense reported in 2021 be the same as, greater than, or less than the amount that would be reported if the straight-line method of amortization were used? 3340000 Total cost of borrowing over the life of the bond $ greater than the amount that would be reported if the straight-line me (3) Determine the total cost of borrowing over the life of the bond. (Round answer to O decimal places, e.g. 38,548.)
On June 30, 2020, Shamrock Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Shamrock uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare the journal entries to record the following transactions. (Round answer to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) (2) Your answer is correct. (3) (4) The issuance of the bonds on June 30, 2020. The payment of interest and the amortization of the premium on December 31, 2020. The payment of interest and the amortization of the premium on June 30, 2021. The payment of interest and the amortization of the premium on December 31, 2021.
Transcribed Image Text:On June 30, 2020, Shamrock Company issued $3,340,000 face value of 14%, 20-year bonds at $3,842,540, a yield of 12%. Shamrock uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31. Prepare the journal entries to record the following transactions. (Round answer to O decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) (1) (2) Your answer is correct. (3) (4) The issuance of the bonds on June 30, 2020. The payment of interest and the amortization of the premium on December 31, 2020. The payment of interest and the amortization of the premium on June 30, 2021. The payment of interest and the amortization of the premium on December 31, 2021.
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