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On March 1, 2020, Jagger Metal Corp. issued 8.5% bonds dated January 1, 2020. The bonds have a $901,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months’ interest that had accrued since the original issue date.   a) How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020? (Round the final answer to the nearest whole dollar.)   b) Prepare the journal entries that Jagger would make to record: (1) the issuance of the bonds on March 1, 2020; (2) the first interest payment on June 30, 2020; and (3) the second interest payment on December 31, 2020.

On March 1, 2020, Jagger Metal Corp. issued 8.5% bonds dated January 1, 2020. The bonds have a $901,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months’ interest that had accrued since the original issue date.   a) How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020? (Round the final answer to the nearest whole dollar.)   b) Prepare the journal entries that Jagger would make to record: (1) the issuance of the bonds on March 1, 2020; (2) the first interest payment on June 30, 2020; and (3) the second interest payment on December 31, 2020.

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 March 1, 2020, Jagger Metal Corp. issued 8.5% bonds dated January 1, 2020. The bonds have a $901,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months’ interest that had accrued since the original issue date.

 

a) How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020? (Round the final answer to the nearest whole dollar.)

 

b) Prepare the journal entries that Jagger would make to record: (1) the issuance of the bonds on March 1, 2020; (2) the first interest payment on June 30, 2020; and (3) the second interest payment on December 31, 2020.

On March 1, 2020, Jagger Metal Corp. issued 8.5% bonds dated January 1, 2020. The bonds have a $901,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months' interest that had accrued since the original issue date. a. How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020? (Round the final answer to the nearest whole dollar.) Accrued interest $ 12,764 b. Prepare the journal entries that Jagger would make to record: (1) the issuance of the bonds on March 1, 2020; (2) the first interest payment on June 30, 2020; and (3) the second interest payment on December 31, 2020. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 March 01, 2020 Cash Bonds payable Interest payable 2 June 30, 2020 Interest payable Bond interest expense Cash 3 December 31, 2020 Interest payable Cash
Transcribed Image Text:On March 1, 2020, Jagger Metal Corp. issued 8.5% bonds dated January 1, 2020. The bonds have a $901,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months' interest that had accrued since the original issue date. a. How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020? (Round the final answer to the nearest whole dollar.) Accrued interest $ 12,764 b. Prepare the journal entries that Jagger would make to record: (1) the issuance of the bonds on March 1, 2020; (2) the first interest payment on June 30, 2020; and (3) the second interest payment on December 31, 2020. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 March 01, 2020 Cash Bonds payable Interest payable 2 June 30, 2020 Interest payable Bond interest expense Cash 3 December 31, 2020 Interest payable Cash
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