Question
1) Skysong Corporation issued $620,000 of 9% bonds on November 1, 2017, for $656,123. The bonds were dated November 1, 2017, and mature in 8
1) Skysong Corporation issued $620,000 of 9% bonds on November 1, 2017, for $656,123. The bonds were dated November 1, 2017, and mature in 8 years, with interest payable each May 1 and November 1. Skysong uses the effective-interest method with an effective rate of 8%. Prepare Skysongs December 31, 2017, adjusting entry.
2)On January 1, 2017, Skysong Corporation issued $450,000 of 7% bonds, due in 8 years. The bonds were issued for $478,264, and pay interest each July 1 and January 1. The effective-interest rate is 6%. Prepare the companys journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Skysong uses the effective-interest method.
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