Question
Carla Corporation wished to raise money for a series of upcoming projects. On July 1, 2020, the company issued bonds with a face value of
Carla Corporation wished to raise money for a series of upcoming projects. On July 1, 2020, the company issued bonds with a face value of $5,702,000 due in 5 years, paying interest at a face rate of 6% on January 1 and July 1 each year. The bonds were issued to yield 4%. Carla used the effective interest method of amortization for bond discounts or premiums. The companys year-end was September 30. 1. Calculate the premium or discount on the bonds. (For calculation purposes, use 5 decimal places as displayed in the factor table provided and answers to 0 decimal places, e.g. 5,275.) 2. Prepare a complete Bond Premium/Discount Amortization Schedule (i.e. all five years) for Carla Corporation. (Round answers to 0 decimal places, e.g. 5,275.) 3. Prepare the journal entry to record the issue of the bonds. 4. Prepare any required accrual entry at September 30, 2020.
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