Western Inc. issues $800,000 of 5-year, 6% bonds on January 1, 2021. The bonds pay interest annually.
Question:
Western Inc. issues $800,000 of 5-year, 6% bonds on January 1, 2021. The bonds pay interest annually.
Instructions
a. Calculate the issue price of the bonds using a market rate of 5% and record the bond issue.
b. Prepare an effective-interest amortization table for the bonds.
c. Prepare the journal entries to record the first three interest payments. Ignore any year-end accruals of interest.
d. Assuming Western has an October 31 year end, prepare the adjusting entry for interest on October 31, 2021.
Step by Step Answer:
a Market interest rate 5 800000 078353 800000 6 432948 834639 Using a financial calculator PV Yields ...View the full answer
Accounting Principles Volume 2
ISBN: 978-1119502555
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
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A journal entry is an act of keeping or making records of any transactions either economic or non-economic. Transactions are listed in an accounting journal that shows a company\'s debit and credit balances. The journal entry can consist of several recordings, each of which is either a debit or a credit
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