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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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Please put all of the necessary data and computations for better understanding. Thanks ?

5. On March 1, 2002, Pyne Furniture Co. issued P700,000 of 10 percent bonds to yield 8 percent. Interest is payable semiannually on February 28 and August 31. The bonds mature in ten years. Pyne Furniture Co. is a calendar-year corporation. Requirement: a. Determine the issue price of the bonds. Show your computations. b. Prepare an amortization table through the first two interest periods using the effective-interest method c. Prepare the journal entries to record bond-related transactions as of the following dates: (a) March 1, 2002 (b) August 31, 2002 (c) December 31, 2002 (d) February 28, 2003 (Assume no reversing entries are made)
Transcribed Image Text:5. On March 1, 2002, Pyne Furniture Co. issued P700,000 of 10 percent bonds to yield 8 percent. Interest is payable semiannually on February 28 and August 31. The bonds mature in ten years. Pyne Furniture Co. is a calendar-year corporation. Requirement: a. Determine the issue price of the bonds. Show your computations. b. Prepare an amortization table through the first two interest periods using the effective-interest method c. Prepare the journal entries to record bond-related transactions as of the following dates: (a) March 1, 2002 (b) August 31, 2002 (c) December 31, 2002 (d) February 28, 2003 (Assume no reversing entries are made)
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