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Grove Corporation issued $6,000,000 of 8% bonds on Jan 1, 2017, due on Jan 1, 2022. The interest is to be paid twice a year
Grove Corporation issued $6,000,000 of 8% bonds on Jan 1, 2017, due on Jan 1, 2022. The interest is to be paid twice a year on July 1 and Jan 1. The bonds were sold to yield 10% effective annual interest. Grove Corporation closes its books annually on December 31. (a) Complete the following amortization schedule for the dates indicated. (Round all answers to the nearest dollar.) Use the effective-interest method. Cash Payment Interest Expense Discount Amortization Carrying Amount of Bonds Jan 1, 2017 X X X $5,536,676 July 1, 2017 Jan 1, 2018 (b) Prepare the journal entry for bond issuance on January 1, 2017. (c) Prepare the adjusting entry for December 31, 2017. Use the effective-interest method. (d) Prepare the journal entry for the interest payment on January 1, 2018. (e) Assume Grove Corporate calls the bond for 101 on a later date when unamortized discount is 10,000 dollars, prepare the journal entry for this early redemption
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