Bond Discount, Entries for Bonds Payable Transactions

Required:

Journalize the entry to record the amount of cash proceeds from the issuance of the bonds on July $1,$ Year $1.$ If an amount box does not require an entry, leave it blank.

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Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

Journalize the entries to record the following: If an amount box does not require an entry, leave it blank. Round your answer to the nearest dollar.

a$.$ The first semiannual interest payment on December $31,$ Year $1,$ and the amortization of the bond discount, using the straight$-$line method.

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Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

The straight$-$line method of amortization provides equal amounts of amortization over the life of the bond.

b$.$ The interest payment on June $30,$ Year $2,$ and the amortization of the bond discount, using the straight$-$line method.

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Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account.

The straight$-$line method of amortization provides equal amounts of amortization over the life of the bond.

Determine the total interest expense for Year $1.$ Round to the nearest dollar.

Will the bond proceeds always be less than the face amount of the bonds when the contract rate is less than the market rate of interest

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Present value of the face amount

Present value of the semiannual interest payments

Price received for the bonds