On January 1, 2016, Knorr Corporation issued $800,000 of 6%, 5-year bonds dated January 1, 2016. The
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Question:
On January 1, 2016, Knorr Corporation issued $800,000 of 6%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 7%. Bond issue costs associated with the bonds totaled $18,848.31.Required:
| Prepare the journal entries to record the following: |
January 1, 2016 | Sold the bonds at an effective rate of 7% |
December 31, 2016 | First interest payment using the effective interest method |
December 31, 2016 | Amortization of bond issue costs using the straight-line method |
December 31, 2017 | Second interest payment using the effective interest method |
December 31, 2017 | Amortization of bond issue costs using the straight-line method |
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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