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Question six: On January 1, 2022, Kirmer Corp. purchased €450, 000 of 6% bonds interest payable on January 1 and July 1, for €428,800 (a 7% effective interest rate). The bonds mature on January 1, 2028. Record amortization and interest revenue on the appropriate dates by the effective - interest method (round to the nearest dollar). (Assume bonds are non-trading.) Instructions (a) Prepare the entry for January 1, 2022. (b) The bonds are sold on October 1, 2022 for €427,000 plus accrued interest. Prepare all entries required to properly record the sale. Solution

Question six: On January 1, 2022, Kirmer Corp. purchased €450, 000 of 6% bonds interest payable on January 1 and July 1, for €428,800 (a 7% effective interest rate). The bonds mature on January 1, 2028. Record amortization and interest revenue on the appropriate dates by the effective - interest method (round to the nearest dollar). (Assume bonds are non-trading.) Instructions (a) Prepare the entry for January 1, 2022. (b) The bonds are sold on October 1, 2022 for €427,000 plus accrued interest. Prepare all entries required to properly record the sale. Solution

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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Question six: On January 1, 2022, Kirmer Corp. purchased €450, 000 of 6% bonds, interest payable on January 1 and July 1, for €428,800 (a 7% effective interest rate). The bonds mature on January 1, 2028. Record amortization and interest revenue on the appropriate dates by the effective - interest method (round to the nearest dollar). (Assume bonds are non-trading.) Instructions (a) Prepare the entry for January 1, 2022. (b) The bonds are sold on October 1, 2022 for €427,000 plus accrued interest. Prepare all entries required to properly record the sale. Solution
Transcribed Image Text:Question six: On January 1, 2022, Kirmer Corp. purchased €450, 000 of 6% bonds, interest payable on January 1 and July 1, for €428,800 (a 7% effective interest rate). The bonds mature on January 1, 2028. Record amortization and interest revenue on the appropriate dates by the effective - interest method (round to the nearest dollar). (Assume bonds are non-trading.) Instructions (a) Prepare the entry for January 1, 2022. (b) The bonds are sold on October 1, 2022 for €427,000 plus accrued interest. Prepare all entries required to properly record the sale. Solution
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