Question
On December 31, 2012, Hawthorne Corporation issued for $155,989, 5-year bonds with a face amount of $150,000 and a stated (or coupon) rate of 9%.
On December 31, 2012, Hawthorne Corporation issued for $155,989, 5-year bonds with a face amount of $150,000 and a stated (or coupon) rate of 9%. The bonds pay interest annually and have an effective interest rate of 8%. Assume Hawthorne uses the effective interest rate method.
1A. Prepare the amortization table through 2014. If an amount box does not require an entry, leave it blank or enter "0". If required, round your answers to the nearest whole dollar.
1B. Prepare the journal entry for December 31, 2013, to record the payment of interest and the related interest expense. If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest whole dollar.
1C. Calculate the annual interest expense for 2013 and 2014. If required, round your answers to the nearest whole dollar.
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