Stevens Manufacturing Company obtained authorization to issue 10-year bonds with a face value of $5 million. The

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Stevens Manufacturing Company obtained authorization to issue 10-year bonds with a face value of $5 million. The bonds are dated June 1, 2021, and have a contract rate of interest of 6 percent. They pay interest on December 1 and June 1. The bonds are issued on September 1, 2021, at 100 plus 3 months’ accrued interest.

Instructions.

Prepare the necessary journal entries in general journal form on the following.
a. September 1, 2021, to record the issuance of the bonds.
b. December 1, 2021, to record the first semiannual interest payment on the bond issue.
c. December 31, 2021, to record interest expense accrued through year-end.
d. June 1, 2022, to record the second semiannual interest payment.
e. What was the prevailing market rate of interest on the date that the bonds were issued? Explain.

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Question Posted: Jun 24, 2022 01:22 AM

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Stevens Manufacturing Company obtained authorization to issue 10-year bonds with a face value of $5 million. The

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General Journal a 2021 Sept 1 Cash 5075000 Bonds Payable 5000000 Bond Interest Payabl...View the full answer

Financial And Managerial Accounting The Basis For Business Decisions

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