Babcock Incorporated issued bonds to White Corporation on January 1, 2023 with following terms: 5-year maturity, annual
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Question:
Babcock Incorporated issued bonds to White Corporation on January 1, 2023 with following terms: 5-year maturity, annual coupon rate of 6%, pays interest on June 30 and December 31, $200,000 principal.
Consider three different cases:
(a) issued at par
(b) issued at 95
(c) issued at 102.
REQUIRED:
Assume that White Corporation intends to hold to maturity the bonds. Prepare the journal entries required on January 1, 2023, and on June 30, 2023, for both parties. Use straight-line amortization to record interest.
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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