Question
On January 1, 2018, for $18.6 million, Cenotaph Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20.6 million. For bonds
On January 1, 2018, for $18.6 million, Cenotaph Company purchased 10% bonds, dated January 1, 2018, with a face amount of $20.6 million. For bonds of similar risk and maturity, the market yield is 12%. Interest is paid semiannually on June 30 and December 31.
Required: 1. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method. 2. Prepare the journal entry to record interest on December 31, 2018, using the effective interest method.
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Water Audits And Loss Control Programs
Authors: American Water Works Association
4th Edition
1625761007, 978-1625761002
