Question
Microsoft Word - Acct4501 Quiz 1 Effective Interest Method On January 1, 2013 Husky Inc issued $10 million of 4% semi-annual bonds dated December 31,
Effective Interest Method
On January 1, 2013 Husky Inc issued $10 million of 4% semi-annual bonds dated December 31, 2023. Bonds with similar characteristics to these pay interest at 6%. At January 1, 2013 the following journal entry was made:
Cash 8,512,252 Discount on Bond Payable 1,487,747
Bonds Payable 10,000,000
Required
- Record the June 30, 2013 interest payment
- Record the December 31, 2013 interest payment
- Assuming the bond is held to maturity how much interest expense will Husky Inc recognize over the life of the bond.
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College Accounting
Authors: Heintz and Parry
20th Edition
1285892070, 538489669, 9781111790301, 978-1285892078, 9780538489669, 1111790302, 978-0538745192
