Question
Legacy issues $640,000 8.5% four-year bonds dated January 1, 2017, which pay interest semiannually on June 30 and December 31. They are issued for $570,443
Legacy issues $640,000 8.5% four-year bonds dated January 1, 2017, which pay interest semiannually on June 30 and December 31. They are issued for $570,443 and their market rate is 12% on the issuance date.
Record the $640,000 par value bond issue in cash on January 1, 2017 at an issue price of $570,443.
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Determine the total interest expense of the bonds that will be recognized over the life of the bonds.
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Prepare a straight-line amortization table for the first two years of the bonds.
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Record the interest payment and amortization on June 30, 2017.
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Record interest payment and amortization as of December 31, 2017.
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