Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay
Question:
Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay interest annually.
Instructions
a.
1. Prepare the journal entry to record the issuance of the bonds.
2. Compute the total cost of borrowing for these bonds.
b. Repeat the requirements from part (a), assuming the bonds were issued at 105.
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a 1 Cash 500000 x 97 485000 Discount on Bonds Payable 15000 Bonds Payable 500000 2 Annual interest p...View the full answer
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Related Book For
Accounting Principles
ISBN: 978-1119411482
13th edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
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