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On January 1, 2021 Beeby Ltd. issues bonds that are sold in the market at a price of 113.77 and receives proceeds of $102,393,000 to
| On January 1, 2021 Beeby Ltd. issues bonds that are sold in the market at a price of 113.77 and receives proceeds of $102,393,000 to yield 7.00%. The bonds pay interest semi-annually at 8.5% and mature in 17 years. | ||||||||
| Required | ||||||||
| a. Show the journal entry to record the issuance of the bonds. | ||||||||
| b. What is the face value of the bonds? | ||||||||
| c. Are the bonds issued at par or with a discount or premium? Will the carrying value of the liability for these bonds increase over time, or decrease? Explain briefly. | ||||||||
| d. Show the journal entries to record the first two interest payments on these bonds. Ignore year-end accruals of interest. | ||||||||
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Intermediate Accounting
Authors: Kin Lo, George Fisher
3rd Edition Vol. 1
133865940, 133865943, 978-7300071374
