Spearhead Specialties issued a 2-year, $150,000, 14% debenture on January 1, 20X3 dated as of that date.

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Spearhead Specialties issued a 2-year, $150,000, 14% debenture on January 1, 20X3 dated as of that date. The bond will pay interest every June 30 and December 31, with the principal to be paid on December 31, 20X4.

The effective interest rate on the bond is 10%, and the company uses effective-interest amortization.

a. determine the selling price for the bond.

b. provide the journal entry on January 1, 20X3.

Related Book For answer-question

Intermediate accounting

ISBN: 978-0077647094

7th edition

Authors: J. David Spiceland, James Sepe, Mark Nelson

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Posted Date: Jun 10, 2020 03:45 AM

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Spearhead Specialties issued a 2-year, $150,000, 14% debenture on January 1, 20X3 dated as of that date.

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a Selling price of bond is calculated as below Present value of cash flow CF1rn CF Cash fl... View the full answer

Intermediate accounting

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