On January 1, the first day of the fiscal year, Johnson Company issues a $2,000,000, 8%, five-year

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On January 1, the first day of the fiscal year, Johnson Company issues a $2,000,000, 8%, five-year bond, receiving cash of $2,170,600. The bond pays interest semiannually on June 30 and December 31 and is amortized semiannually using the straight-line method.

a. Journalize the issuance of the bond on January 1.

b. Journalize the semiannual interest payments on June 30 and December 31 of the first year. The bond premium amortization is combined with the semiannual interest payment.

c. Determine the carrying amount of the bond at the end of the first year.

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Financial And Managerial Accounting

ISBN: 9781337902663

15th Edition

Authors: Carl S. Warren, Jefferson P. Jones, William B. Tayler

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