Campbell Inc. produces and sells outccor equipment. On July 1, Year 1, Campbell issued $60,000,000 cf 10-year,14% boncs at a market (effective) interest rate of 12%, receiving cash of $66,881,664. Interest on the bcnds ispayable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.Required:If an amount box does not require an entry, leave it biank.1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on 3July 1, Year 1.CashPremium on Bonds PayableBonds Payable vFeedtack2. Journalize the entries to record the following:a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Rourd to thenearest dollar)Interest EspensePremium en Bonds PayableCashFeethacb. The interest payment on June 30, Year 2, and the amortication of the bond premium, using the straight-ltine method. (Round to the nearest dollar)Interest ExpensePremium en Bonds PayableCash

Bonds are issued at a premium as the cash proceeds from the bonds are greater than the value of…

Answered: try to record the amount ef cash…

Business

Accounting

try to record the amount ef cash proceeds from the isuance of the bonds on July 1, Year ands Payable

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

Campbell Inc. produces and sells outccor equipment. On July 1, Year 1, Campbell issued $60,000,000 cf 10-year,
14% boncs at a market (effective) interest rate of 12%, receiving cash of $66,881,664. Interest on the bcnds is
payable semiannually on December 31 and June 30. The fiscal year of the company is the calendar year.
Required:
If an amount box does not require an entry, leave it biank.
1. Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on 3July 1, Year 1.
Cash
Premium on Bonds Payable
Bonds Payable v
Feedtack
2. Journalize the entries to record the following:
a. The first semiannual interest payment on December 31, Year 1, and the amortization of the bond premium, using the straight-line method. (Rourd to the
nearest dollar)
Interest Espense
Premium en Bonds Payable
Cash
Feethac
b. The interest payment on June 30, Year 2, and the amortication of the bond premium, using the straight-ltine method. (Round to the nearest dollar)
Interest Expense
Premium en Bonds Payable
Cash

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