On March 1, 2020, Jagger Metal Corp. issued 9% bonds dated January 1, 2020. The bonds have

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On March 1, 2020, Jagger Metal Corp. issued 9% bonds dated January 1, 2020. The bonds have a $902,000 par value, mature in 20 years, and pay interest semiannually on June 30 and December 31. The bonds were sold to investors at their par value plus the two months’ interest that had accrued since the original issue date.

a. How much accrued interest was paid to Jagger by the purchasers of these bonds on March 1, 2020?

b. Show the journal entries that Jagger would make to record:

1. the issuance of the bonds on March 1, 2020;

2. the first interest payment on June 30, 2020; and

3. the second interest payment on December 31, 2020.

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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Fundamental Accounting Principles Volume II

ISBN: 978-1260305838

16th Canadian edition

Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann

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