2) Vaughn Corporation issued $300,000 face value ten-year, 10% bonds on January 1, 2001, for $340,260....

 

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2) Vaughn Corporation issued $300,000 face value ten-year, 10% bonds on January 1, 2001, for $340,260. The bonds pay interest annually on January 1 and the effective interest rate is 8%. Show all of your calculations. a) Assuming that the premium on bonds payable is amortized using the straight-line method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of [4] b) Assuming that the premium on bonds payable is amortized using the effective interest method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of 2) Vaughn Corporation issued $300,000 face value ten-year, 10% bonds on January 1, 2001, for $340,260. The bonds pay interest annually on January 1 and the effective interest rate is 8%. Show all of your calculations. a) Assuming that the premium on bonds payable is amortized using the straight-line method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of [4] b) Assuming that the premium on bonds payable is amortized using the effective interest method, Vaughn should report premium on bonds payable on its December 31, 2001, balance sheet of

Answer rating: 100% (QA)

2 A Straighline method Present Value Less Face Value Premium on b... View the full answer