Brown & Co., a calendar-year firm, is authorized to issue $500,000 of 11%, 15-year bonds dated May
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Brown & Co., a calendar-year firm, is authorized to issue $500,000 of 11%, 15-year bonds dated May 1, 2012, with interest payable semiannually on May 1 and November 1.
Amortization of bond premiums or discounts is recorded using the straight-line amortization method. Prepare journal entries to record the following events, assuming that the bonds are sold at 97 on May 1, 2012.
1. The bond issuance on May 1, 2012
2. Payment of interest on November 1, 2012
3. Adjusting entry on December 31, 2012
4. Payment of interest on May 1, 2013
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1 2012 May 1 Cash 485000 Discount on Bonds 15000 Bonds Payable 500000 Issued 15year 11 bonds at 97 5...View the full answer
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Related Book For 
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
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