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Analyzing and Reporting Financial Statement Effects of Bond Transactions On January 1, Hutton Corp. issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an

Analyzing and Reporting Financial Statement Effects of Bond Transactions

On January 1, Hutton Corp. issued $400,000 of 15-year, 11% bonds payable for $503,753, yielding an effective interest rate of 8%. Interest is payable semiannually on June 30 and December 31.

a. Prepare journal entries to record the bond issuance, semiannual interest payment, and premium amortization on June 30, and semiannual interest payment and premium amortization on December 31. Use the effective interest rate method.

? Note: Carry all decimals in calculations; round the final answer to the nearest dollar.

image text in transcribedimage text in transcribedimage text in transcribed
Date Account Debit Credit Jan. 1 w To record issuance of bonds. Jun. 30 w To record first semiannual installment. Dec. 31 w W W To record second semiannual installment.

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