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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay interest annually. Instructions

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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 500 000 x 97 485 000 Discount on Bonds Payable 15 000 Bonds Payable 500 000 2 Annual intere…View the full answer


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Related Book For  answer-question
Accounting Principles

Accounting Principles

ISBN: 978-1119411482

13th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Details
Chapter # 15- Long-Term Liabilities
Section: Exercises
Problem: 6
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Question Posted: January 15, 2019 06:42:42
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