Question
Chuck Intermediate Issued a bond on January 1, 1900 for $100,000 of 5%, 7-year, and the market rate interest is 7%. Interest will be paid
Chuck Intermediate Issued a bond on January 1, 1900 for $100,000 of 5%, 7-year, and the market rate interest is 7%. Interest will be paid semi-annually on June 30th and December 31th. Chuck Intermediate uses effective interest method. On December 31, 1905, the half of the bonds were retired by the company after the 12/31/1905 interest payment by purchasing them on the market at $120,000.
1. Compute the Issue price of the bonds on 1/1,1900.
2. Prepare amortization table for the life of the bonds.
3. Prepare journal entry to record issuance of the bonds on 1/1/1900.
4. Prepare journal entries for interest payment on 6/30/1900 and 12/31/1900.
5. Prepare jornal entry for the partial retirement of the bonds on 12/31/1905.
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