Recording Bond Entries and Preparing an Amortization Schedule Effective Interest Method, Premium Mitchell Inc. issued 60 of its 6%, $1,000 bonds on January 1 of Year 1. The bonds pay cash interest semiannually each June 30 and December 31 and were issued to yield 5%. The bonds mature in five years on December 31, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Determine the selling price of the bonds. b. Prepare an amortization schedule for the first two years of the bond term. c. Prepare journal entries on the following dates. 1. January 1 of Year 1, bond issuance. 2. June 30 of Year 1, interest payment. 3. December 31 of Year 1, interest payment.
Recording Bond Entries and Preparing an Amortization Schedule Effective Interest Method, Premium Mitchell Inc. issued 60 of its 6%, $1,000 bonds on January 1 of Year 1. The bonds pay cash interest semiannually each June 30 and December 31 and were issued to yield 5%. The bonds mature in five years on December 31, and the company uses the effective interest method to amortize bond discounts or premiums. Required a. Determine the selling price of the bonds. b. Prepare an amortization schedule for the first two years of the bond term. c. Prepare journal entries on the following dates. 1. January 1 of Year 1, bond issuance. 2. June 30 of Year 1, interest payment. 3. December 31 of Year 1, interest payment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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please solve A through C with full work
Transcribed Image Text:Recording Bond Entries and Preparing an Amortization Schedule-Effective Interest Method, Premium
Mitchell Inc. issued 60 of its 6%, $1,000 bonds on January 1 of Year 1. The bonds pay cash interest semiannually each June 30 and December
31 and were issued to yield 5%. The bonds mature in five years on December 31, and the company uses the effective interest method to
amortize bond discounts or premiums.
Required
a. Determine the selling price of the bonds.
b. Prepare an amortization schedule for the first two years of the bond term.
c. Prepare journal entries on the following dates.
1. January 1 of Year 1, bond issuance.
2. June 30 of Year 1, interest payment.
3. December 31 of Year 1, interest payment.
Bond Selling Price
Amortization Schedule
Note: Round your answers to the nearest whole dollar.
Journal Entries
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