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i need help!! thank you! Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $390,000 of 20 -year, 9% bonds on
i need help!!
thank you!
Thomson Co. produces and distributes semiconductors for use by computer manufacturers. Thomson issued $390,000 of 20 -year, 9% bonds on May 1 of the current year at face value, with interest payable on May 1 and November 1 . The fiscal year of the company is the calendar year. May 1 Issued the bonds for cash at their face amount. Nov. 1 Paid the interest on the bonds. Dec. 31 Recorded accrued interest for two months. Smiley Corporation wholesales repair products to equipment manufacturers. On April 1,20Y1, Smiley issued $8,200,000 of 5 -year, 7% bonds at a market (effective) interest rate of 6%, receiving cash of $8,549,739. Interest is payable semiannually on April 1 and October 1. a. Journalize the entry to record the issuance of bonds on April 1, 20Y1. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the first interest payment on October 1,20Y1, and amortization of bond premium for six months, using the straight-line method. Round to t nearest dollar. If an amount box does not require an entry, leave it blank. c. Why was the company able to issue the bonds for $8,549,739 rather than for the face amount of $8,200,000 ? The market rate of interest is the contract rate of interestStep by Step Solution
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