Question: On December 31 20X1 Northeast Financial Corp issued 20 million

On December 31, 20X1, Northeast Financial, Corp., issued $20 million of 8-year, 10% debentures at par. Interest is paid semiannually.
1. Compute the proceeds from issuing the debentures.
2. Using the balance sheet equation format, prepare an analysis of this bond transaction. Show entries for the issuer concerning
(a) Issuance,
(b) First semiannual interest payment,
(c) Payment of maturity value.
3. Show all the corresponding journal entries keyed as in requirement 2.
4. Show how the bond-related accounts would appear on the balance sheet as of December 31, 20X1, and June 30, 20X2. Assume that the semiannual interest payment due on June 30, 20X2, has been made.

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  • CreatedFebruary 20, 2015
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