Refer to the information in RE13-1. Prepare the journal entry' on June 30 for Gatrong to record

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Refer to the information in RE13-1. Prepare the journal entry' on June 30 for Gatrong to record the first interest receipt, using the effective interest method. Round to the nearest dollar.
In RE13-1
On January' 1, 2016, Gatrong Corporation purchased 12%, 5-year Fleming Corporation bonds with a face value of $200,000. It expects to hold these bonds until maturity. The bonds pay interest semiannually on June 30 and December 31. Gatrong paid $215,443, a price that yields a 10% effective annual interest rate.
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...
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...
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Intermediate Accounting Reporting and Analysis

ISBN: 978-1285453828

2nd edition

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

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