On January 1, 2014, Terrel Company sold $100,000 of 10-year, 8% bonds at 93.5, an effective rate
Question:
On January 1, 2014, Terrel Company sold $100,000 of 10-year, 8% bonds at 93.5, an effective rate of 9%. Interest is to be paid on July 1 and December 31. Compute the amount of premium or discount amortization in 2014 and 2015 using
(1) The straight-line method
(2) The effective-interest method. Make the journal entries to record the amortization when the effective-interest method is used.
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1 StraightLine Method The amount of discount amortized under the straightline method is the same for ...View the full answer
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Sultan Ghulam Dastgir
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