Chapter $21$ Assignment

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References

Agee Technology, Incorporated, issued $9\%$ bonds, dated January $1,$ with a face amount of $$1,000$ million on July $1,2024,$ at a price of $$990$ million. For bonds of similar risk and maturity, the market yield is $10\%.$ Interest is paid semi$-$annually on June $30$ and December $31.$

Required:

Prepare the journal entry to record interest at the effective interest rate at December $31.$ What would be the amount$($s$)$ related to the bonds that Agee would report in its statement of cash flows for the year ended December $31,2024,$ if it uses the direct method?

Complete this question by entering your answers in the tabs below.

General

Journal

Cash Paid

Prepare the journal entry to record infest at the effective interest rate at December $31.$

Note: If no entry is required for a transaction$/$event$,$ select $"$No journal entry required" in the first account field. Enter your answers in millions rounded to $1$ decimal place $($i$.$e$.,5,500,000$ should be entered as $5\mathrm{.}5).$

$\backslash$table$[[$View transaction list$],[,$No$,$Date,General journal,Debit,Credit$],[0,1,$December $31,$Interest expense,$49\mathrm{.}5,],[,,$Discount on bonds payable,,$4\mathrm{.}5],[,,$Cash,,$45\mathrm{.}0]]$