Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2017. The bonds pay

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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2017. The bonds pay interest annually.

Requirements:

a) Prepare the journal entry to record the issuance of the bonds.

b) Compute the total cost of borrowing for these bonds.

c) Prepare the journal entry to record the issuance of the bonds, assuming the bonds were issued at 105.

d) Compute the total cost of borrowing for these bonds, assuming the bonds were issued at 105.

Related Book For answer-question

Fundamental Accounting Principles

ISBN: 978-0078110870

20th Edition

Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta

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Posted Date: Oct 09, 2018 06:31 AM

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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2017. The bonds pay

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Expert Answer:

Answer a Face value of Bound 500000 Proceed form issue 97 500000 Proceed form issue 485000 Discount ... View the full answer

Fundamental Accounting Principles

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