Windsor Company borrowed money by issuing $3,000,000 of 6% bonds payable at 102.9 on July 1, 2021.
Question:
Windsor Company borrowed money by issuing $3,000,000 of 6% bonds payable at 102.9 on July 1, 2021. The bonds are five-year bonds and pay interest each January 1 and July 1.
1. How much cash did Windsor receive when it issued the bonds payable? Journalize this transaction.
2. How much must Windsor pay back at maturity? When is the maturity date?
3. How much cash interest will Windsor pay each six months?
4. How much interest expense will Windsor report each six months? Use the straight-line amortization method. Journalize the entries for the accrual of interest and the amortization of premium on December 31, 2021, and the payment of interest on January 1, 2022.
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Req 1 Received 3087000 3000000 x 1029 3087000 Req 2 Pay back 3000000 a...View the full answer
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