Tarheel Inc., a calendar year-end company, issued bonds on 1/1/X1. It uses theeffective interest method to amortize bond discounts and premiums.The following facts are known about these bonds:Issue Date: 1/1/X1Face Value: $900,000Issue Price: $823,000Face Rate: 4% compounded semi-annually (in other words, 2% every sixmonths)Market (Effective) Rate: 6% compounded semi-annually (in other words, 3%every six months)Term: 5 yearsSemi-Annual Interest Payment Dates: June 30 and Dec 31First interest payment will occur on: June 30, 20X1Note: Round all calculations to the nearest whole dollar.Required: Using the above information, prepare the journal entries to record: (1)the issuance of the bonds and (2) the first cash interest payment on 6/30/X1.Remember to round all amounts to the nearest whole dollar. Decimals or centsshould not be shown in the numerical response portion of your journal entry. Required: Using the above information, prepare the journal entries to record: (1)the issuance of the bonds and (2) the first cash interest payment on 6/30/X1.Remember to round all amounts to the nearest whole dollar. Decimals or centsshould not be shown in the numerical response portion of your journal entry.DateAccount NameDebitCredit1/1/X16/30/X1

The journal entries are prepared to keep the record of day to day transactions of the business. Bond…

Tarheel Inc., a calendar year-end company, issued bonds on 1/1/X1. It uses the effective interest method to amortize bond discounts and premiums. The following facts are known about these bonds: Issue Date: 1/1/X1 Face Value: $900,000 Issue Price: $823,000 Face Rate: 4% compounded semi-annually (in other words, 2% every six months) Market (Effective) Rate: 6% compounded semi-annually (in other words, 3% every six months) Term: 5 years Semi-Annual Interest Payment Dates: June 30 and Dec 31 First interest payment will occur on: June 30, 20X1 Note: Round all calculations to the nearest whole dollar.

Tarheel Inc., a calendar year-end company, issued bonds on 1/1/X1. It uses the effective interest method to amortize bond discounts and premiums. The following facts are known about these bonds: Issue Date: 1/1/X1 Face Value: $900,000 Issue Price: $823,000 Face Rate: 4% compounded semi-annually (in other words, 2% every six months) Market (Effective) Rate: 6% compounded semi-annually (in other words, 3% every six months) Term: 5 years Semi-Annual Interest Payment Dates: June 30 and Dec 31 First interest payment will occur on: June 30, 20X1 Note: Round all calculations to the nearest whole dollar.

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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