Question: On April 1, 2011, Arnwine Supply issued $ 50,000,000 in 15- year, 10 percent bonds that pay interest annually on April 1. The bonds were
On April 1, 2011, Arnwine Supply issued $ 50,000,000 in 15- year, 10 percent bonds that pay interest annually on April 1. The bonds were issued on April 1, 2009, when the market interest rate was 11 percent. Arnwine Supply’s fiscal year ends December 31.
Required:
A. Make the amortization schedule for this bond issue.
B. Prepare the journal entries for the first two years of the bond issue’s life.
C. Show how Arnwine Supply reports the events involving the bond issue on its income statement, balance sheet, and statement of cash flows for the years ended December 31, 2011, and December 31, 2012.
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A FV 50000000 c 1 r 11 n 15 ANN 5000000 PV 4640456521 Period Payment Interest Amortization Discount Carrying Value 359543479 4640456521 1 500000000 51... View full answer
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