Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The bonds

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Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date.

Required

1. Calculate the total bond interest expense over the bonds’ life.

2. Prepare a straight-line amortization table like Exhibit 14.11 for the bonds’ life.

3. Prepare the journal entries to record the first two interest payments.

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Fundamental Accounting Principles

ISBN: 978-1259916960

24th edition

Authors: John J Wild, Ken Shaw

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Question Posted: Jul 10, 2019 07:10 AM

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Ellis Company issues 6.5%, five-year bonds dated January 1, 2019, with a $250,000 par value. The bonds

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Part 1 Ten payments of 8125 81250 Less premium 5333 Total bond interest expense 75917 or T...View the full answer

Fundamental Accounting Principles

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