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Prepare a bond premium amortization schedule for the first four interest periods. Annual Interest Periods Issue date 1 2 Interest to Be Paid Interest Expense to Be Recorded Premium Amortization

Prepare a bond premium amortization schedule for the first four interest periods. Annual Interest Periods Issue date 1 2 Interest to Be Paid Interest Expense to Be Recorded Premium Amortization

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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Prepare a bond premium amortization schedule for the first four interest periods. Annual Interest Periods Issue date 1 A W N 3 4 $ Interest to Be Paid $ Interest Expense to Be Recorded Premium Amortization
Transcribed Image Text:Prepare a bond premium amortization schedule for the first four interest periods. Annual Interest Periods Issue date 1 A W N 3 4 $ Interest to Be Paid $ Interest Expense to Be Recorded Premium Amortization
Metlock, Inc. sold $2,800,000, 6%, 10-year bonds on January 1, 2022. The bonds were dated January 1 and pay interest annually on January 1, Metlock, Inc. uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Jan. 1. 2022 Cash Bonds Payable Premium on Bonds Payable Debit 2828000
Transcribed Image Text:Metlock, Inc. sold $2,800,000, 6%, 10-year bonds on January 1, 2022. The bonds were dated January 1 and pay interest annually on January 1, Metlock, Inc. uses the straight-line method to amortize bond premium or discount. The bonds were sold at 101. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Jan. 1. 2022 Cash Bonds Payable Premium on Bonds Payable Debit 2828000
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