Question
1. On January 1, 2018, Margo Company issued 100, $10,000, 5-year bonds that pay interest annually on December 31 at a stated rate of 9%
1. On January 1, 2018, Margo Company issued 100, $10,000, 5-year bonds that pay interest annually on December 31 at a stated rate of 9% per year. The market rate of interest on the January 1, the date the bonds were issued was 6%.
a. Compute the issuance price of the bonds. Show your work.
b. Prepare the journal entry issue the bonds
c. Prepare a table in Excel to show the journal entries and the Balance sheet amounts (Picture of Table attached)
d. Prepare the journal entries for the 5 interest payments
e. Prepare the journal entry for the final payment of principal.
I really am struggling with how to find carrying value and the amount that is the premium.
Journal Entry Balance Sheet Discount or Premium on Bonds Payable Period EndedCash Paid Amortization Discount or Premium Interest Expense Bonds Payable Carrying ValueStep by Step Solution
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