Question
E17-5 Bond discount; effective-interest amortization (L.O. 2, 5) The Eagle Corporation issued $400,000 of 8% bonds for $382,056 on January 1, 19X1. The bonds
E17-5 Bond discount; effective-interest amortization (L.O. 2, 5) The Eagle Corporation issued $400,000 of 8% bonds for $382,056 on January 1, 19X1. The bonds pay interest semiannually on June 30 and December 31 and were priced to yield an effective interest rate of 9%. a Prepare the required journal entry to record the bond issuance on Janu- ary 1. b Prepare entries to record the interest payment and discount amortiza- tion on June 30 and December 31, 19X1. Eagle utilizes the effective- interest method of amortization; round to the nearest dollar. c Compute 19X1 bond interest expense. 34,439 d Present the proper disclosure of the bond issue on Eagle's December 31, 19X1, balance sheet. C.V= 384,495 1
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