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I need help with chapter 14 thank you On January 1, 2017 the first day of its fiscal year, Rugs, Inc. issued $110,000 of nine-year,
I need help with chapter 14 thank you
On January 1, 2017 the first day of its fiscal year, Rugs, Inc. issued $110,000 of nine-year, 8% bonds when the market rate was 7%, with interest payable semiannually, on June 30 and December 31. The company uses the effective interest rate method to amortize bond discounts and premiums. Calculate the proceeds from the sale of the bonds (selling price) and write your answer. Use the present value tables (Use the numbers exactly as they appear in the table.) Round to the nearest whole dollar when necessary. Prepare all required journal entries for 2017. How much cash will the company pay to the bond holders during 2017? How much interest expense will the company recognize for 2017? At what rate of interest is Rug's Inc. borrowing this money? Justify answer? How much interest expense will the company recognize over the life of the bond? Discuss when an adjusting journal entry is required with respect to bonds payableStep by Step Solution
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