Question
legacy issues $325,000 of 5% four-year bonds dated January 1, 2022, that pay interest semiannually on 6/30 and 12/31. The bonds are issued at par.
legacy issues $325,000 of 5% four-year bonds dated January 1, 2022, that pay interest semiannually on 6/30 and 12/31. The bonds are issued at par.
A.) How much cash proceeds will Austin Inc. receive when they issue bonds?
B.) Assuming the facts above, prepare the journal entry for the issuance of the bonds.
C.) Assuming the facts above, prepare the journal entry for the 1st interest payment on the bonds.
D.) Assuming the facts above, prepare the journal entry for the 2nd interest payment on the bonds. E.) How many times will the above journal entry for the interest payment be made over the life of the bond?
F.) Prepare the journal entry at the end of the bond's life (to extinguish the bond).
G.) How much interest expense will be recognized over the life of the bond?
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