Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2014. The bonds pay

Question:

Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2014. The bonds pay interest twice a year.

Instructions

(a)

(1) Prepare the journal entry to record the issuance of the bonds.

(2) Compute the total cost of borrowing for these bonds.

(b) Repeat the requirements from part (a), assuming the bonds were issued at 105.

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Accounting Principles

ISBN: 9781118566671

11th Edition

Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso

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Question Posted: Jan 30, 2014 02:03 AM

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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2014. The bonds pay

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a 1 Cash 485000 Discount on Bonds Payable 15000 Bonds Payable 500000 2 Semiannual interest pa...View the full answer

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