Question
Corporation issued 8%, 10-year bonds with a face value of $1,200,000 at a price of 93 on July 1, 2021. The bonds pay interest each
Corporation issued
8%,
10-year
bonds with a face value of
$1,200,000
at a price of
93
on July 1,
2021.
The bonds pay interest each January 1 and July 1.
Salford
uses the straight-line amortization method for all bond premiums and discounts. The company has a fiscal year-end of December 31.Read the requirements
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Part 1
Requirement 1. Record the issuance of the bonds on July 1,
2021.
(Record debits first, then credits. Exclude explanations from any journal entries.)
Journal Entry | ||||
Date | Accounts | Debit | Credit | |
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2021 |
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Jul 1 |
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Requirements
1. | Record the issuance of the bonds on July 1, 2021. |
2. | Record the accrual for the cash interest payable on the bonds and the amortization of any premium or discount on the bonds on December 31, 2021. |
3. | Show how the accounts related to the bonds issued on July 1, 2021, would be reported onSalford's balance sheet as of December 31,2021. |
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