P2) On January 1, Sawmill Corporation sold $50,000, 10-year, 10 percent bonds at 94. Interest is payable semiannually on June 30 and December 31. Instruction) Make entries of the followings. (a) To record the issuance of the bonds. (b) To record the interest payments (c) Amortization under the straight-line method (d) Show the carrying amount of the bonds account(T_form) at year's end (e) Explain the amortization under the effective interest method.(within 5 lines)
P2) On January 1, Sawmill Corporation sold $50,000, 10-year, 10 percent bonds at 94. Interest is payable semiannually on June 30 and December 31. Instruction) Make entries of the followings. (a) To record the issuance of the bonds. (b) To record the interest payments (c) Amortization under the straight-line method (d) Show the carrying amount of the bonds account(T_form) at year's end (e) Explain the amortization under the effective interest method.(within 5 lines)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:P2) On January 1, Sawmill Corporation sold $50,000, 10-year, 10 percent bonds at 94. Interest is payable
semiannually on June 30 and December 31.
Instruction) Make entries of the followings.
(a) To record the issuance of the bonds.
(b) To record the interest payments
(c) Amortization under the straight-line method
(d) Show the carrying amount of the bonds account(T_form) at year's end
(e) Explain the amortization under the effective interest method.(within 5 lines)
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