On July 1, 2013, Hope Corporation issued $600,000 of bonds with an 8% face rate of interest.

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On July 1, 2013, Hope Corporation issued $600,000 of bonds with an 8% face rate of interest. The bonds were issued for $589,381.93, pay interest semiannually on June 30 and December 31, carry an effective yield rate of 9%, and are payable in three annual installments of $200,000 each, beginning June 30, 2014.

Required:

1. Prepare a serial bond discount amortization schedule using the bonds outstanding method.

2. Prepare a serial bond discount amortization schedule using the effective interest method.

3. Prepare the journal entries necessary to record the payment of interest and the bond retirements on June 30, 2014, June 30, 2015, and June 30, 2016, using

(a) The bonds outstanding method and

(b) The effective interest method.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Related Book For  book-img-for-question

Intermediate Accounting Reporting and Analysis

ISBN: 978-1111822361

1st edition

Authors: James M. Wahlen, Jefferson P. Jones, Donald Pagach

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