On March 1, 2020, Quinto Mining Inc. issued a $690,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020. 1. Calculate the bond issue price assuming a market interest rate of 7% on the date of issue 2. Using the effective interest method, prepare an amortization schedule. (Image attached) 3. Record the entries for the issuance of the bond on March 1, the adjusting entry to accrue bond interest and related amortization on April 30, 2020, Quinto’s year-end, and the payment of interest on September 1, 2020. Record the issuance of bond Record accrual of interest on bond Record payment of interest
On March 1, 2020, Quinto Mining Inc. issued a $690,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020. 1. Calculate the bond issue price assuming a market interest rate of 7% on the date of issue 2. Using the effective interest method, prepare an amortization schedule. (Image attached) 3. Record the entries for the issuance of the bond on March 1, the adjusting entry to accrue bond interest and related amortization on April 30, 2020, Quinto’s year-end, and the payment of interest on September 1, 2020. Record the issuance of bond Record accrual of interest on bond Record payment of interest
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On March 1, 2020, Quinto Mining Inc. issued a $690,000, 8%, three-year bond. Interest is payable semiannually beginning September 1, 2020.
1. Calculate the
2. Using the effective interest method, prepare an amortization schedule. (Image attached)
3. Record the entries for the issuance of the bond on March 1, the
- Record the issuance of bond
- Record accrual of interest on bond
- Record payment of interest
Transcribed Image Text:Period
Cash Interest Period Interest
Premium
Unamortized
Carrying Value
Ending
Paid
Expense
Amort.
Premium
Mar. 1/20
Sept. 1/20
Mar. 1/21
Sept. 1/21
Mar. 1/22
Sept. 1/22
Mar. 1/23
Totals
$
0 $
Record the entries for the issuance of the bond on March 1 th e adiusting entry to a
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