A company issued 5%, 20 year bonds with a face value of $80 million on January 1

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A company issued 5%, 20 year bonds with a face value of $80 million on January 1 2018. The market yield for bonds of similar risk is 6%. Interest is paid semiannually.

a. What was the interest expense for the first year using the effective interest method?

b. What are the entries to record the interest payment and expense on June 30 2018 and December 31 2018?

Related Book For answer-question

Intermediate Accounting

ISBN: 9781259722660

9th Edition

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

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Posted Date: Feb 27, 2024 04:53 AM

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A company issued 5%, 20 year bonds with a face value of $80 million on January 1

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a To calculate the interest expense for the first year using the effective interest method we need t... View the full answer

Intermediate Accounting

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