DEBT ISSUED AT A DISCOUNT (STRAIGHT LINE) On December 31, 2007, Drew Company issued $170,000, five-year bonds

Question:

DEBT ISSUED AT A DISCOUNT (STRAIGHT LINE)

On December 31, 2007, Drew Company issued $170,000, five-year bonds for

$155,000. The stated rate of interest was 6 percent and interest is paid annually on December 31.

Required:

Provide the necessary journal entry on December 31, 2009, assuming the straight-line method is followed.

Cornerstone Exercise

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