Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay

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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay interest annually.

Instructions
a.

1. Prepare the journal entry to record the issuance of the bonds.
2. Compute the total cost of borrowing for these bonds.
b. Repeat the requirements from part (a), assuming the bonds were issued at 105.

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Accounting Principles

ISBN: 978-1119411482

13th edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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Question Posted: Jan 15, 2019 06:42 AM

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Whitmore Company issued $500,000 of 5-year, 8% bonds at 97 on January 1, 2020. The bonds pay

Question:

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a 1 Cash 500000 x 97 485000 Discount on Bonds Payable 15000 Bonds Payable 500000 2 Annual interest p...View the full answer

Accounting Principles

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