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Novak Company issued $2,090,000, 8%, 20-year bonds on January 1, 2020, at 104. Interest is payable annually on January 1. Novak uses straight-line amortization for
Novak Company issued $2,090,000, 8%, 20-year bonds on January 1, 2020, at 104. Interest is payable annually on January 1. Novak uses straight-line amortization for bond premium or discount. Prepare the journal entries to record the following events. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) (a) The issuance of the bonds. The accrual of interest and the premium amortization on December 31, 2020. (b) (c) The payment of interest on January 1, 2021. The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. (d) Account Titles and Explanation Date Credit Debit Jan. 1, 2020 Cash 2173600 Bonds Payable 2090000 83600 Premium on Bonds Payable 83600 Dec. 31, 2020 Interest Expense 83600 Premium on Bonds Payable 16023 Interest Payable 16023 Interest Expense Jan. 1. 2021 16023 Interest Payable 1-24AM Jan. 1, 2020 CALCUL Cash 2173600| Bonds Payable 2090000 Premium on Bonds Payable 83600 Dec. 31, 2020 Interest Expense 83600 Premium on Bonds Payable 83600 Interest Payable 16023 Interest Expense Jan. 1, 2021 16023 Interest Payable 16023 Jan. 1, 2040 Interest Payable 16023 Interest Expense 16023
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