Question
On January 1, 2019, a company issued a $7,000,000, 9%, 10-year term bond when the market rate for similar bonds was 8%. The bond pays
On January 1, 2019, a company issued a $7,000,000, 9%, 10-year term bond when the market rate for
similar bonds was 8%. The bond pays interest semiannually on June 30 and December 31.The company
received $7,475,660 for the bond. This is the correct amount. The company uses
the effective interest method to account for bond issuances.
a. record the issuance of the bond on January 1, 2023
b. record the interest payment on June 30, 2023. I encourage you to show your work.
c. record the interest payment on December 31, 2023.
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Managerial Accounting An Introduction to Concepts Methods and Uses
Authors: Michael W. Maher, Clyde P. Stickney, Roman L. Weil
10th Edition
1111822239, 324639767, 9781111822231, 978-0324639766
