Question
E10-21 Recording and Reporting a Bond Issued at a Discount (without Discount Account and Straight-Line Amortization) LO10-4, Supplement A On January 1 of this year,
E10-21 Recording and Reporting a Bond Issued at a Discount (without Discount Account and Straight-Line Amortization) LO10-4, Supplement A
On January 1 of this year, Clearwater Corporation sold bonds with a face value of $890,000 and a coupon rate of 8 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 9 percent. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answers to whole dollars.)
Required:
1. Prepare the journal entry to record the issuance of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
2:Record the interest payment on December 31, using straight-line amortization
3:What bonds payable amount will Clearwater report on its December 31 balance sheet?
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