Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2010, for $562,613.This price resulted in an
Question:
Hrabik Corporation issued $600,000, 9%, 10-year bonds on January 1, 2010, for
$562,613.This price resulted in an effective-interest rate of 10% on the bonds. Interest is payable semiannually on July 1 and January 1. Hrabik uses the effective-interest method to amortize bond premium or discount.
Instructions
Prepare the journal entries to record the following. (Round to the nearest dollar.)
(a) The issuance of the bonds.
(b) The payment of interest and the discount amortization on July 1, 2010, assuming that interest was not accrued on June 30.
(c) The accrual of interest and the discount amortization on December 31, 2010.
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...
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Step by Step Answer:
a Jan 1 Cash 562613 Discount on Bonds Payable 37387 Bonds Payable 6000...View the full answer
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Related Book For 
Accounting Principles
ISBN: 978-0470533475
9th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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