(a)
Bonds
Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.
Effective interest rate of amortization bond
Effective interest rate method of amortization is a process of amortizing premium on bond or discount on bond, which allocates the different amount of interest expense in each period of interest payment, but at a constant percentage rate.
To Prepare: The
(b)
To Prepare: The amortization schedule through December 2019 for issuance of bonds of Corporation L.
(c)
To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Corporation L on December 31, 2019.
(d)
To Prepare: The journal entry to record the payment of interest of Corporation L on January 1, 2020.
(e)
To Prepare: The journal entry to record the accrued interest expense and discount on amortize bond for Corporation L on December 31, 2020.
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Chapter 10 Solutions
FINANCIAL ACCT.-W/ETEXTBOOK
- Please explain this financial accounting problem with accurate financial standards.arrow_forwardBrookfield Manufacturing had an estimated 195,000 direct labor hours, $378,300 manufacturing overhead, and 32,000 machine hours. The actual were 198,400 direct labor hours, 33,850 machine hours, and $384,500 manufacturing overhead. They determine overhead based upon machine hours. Calculate the predetermined overhead rate.arrow_forwardPlease provide the solution to this general accounting question using proper accounting principles.arrow_forward
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