Question
On January 1, 2022, Cullumber Company issued $1,000,000 face value, 6%, 10-year bonds at $1,077,217. This price resulted in a 5% effective-interest rate on the
On January 1, 2022, Cullumber Company issued $1,000,000 face value, 6%, 10-year bonds at $1,077,217. This price resulted in a 5% effective-interest rate on the bonds. Cullumber uses the effective-interest method to amortize bond premium or discount. The bonds pay annual interest on each January 1.
Prepare the journal entries to record the following transactions. (Round answers to 0 decimal places, e.g. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
| (1) | The issuance of the bonds on January 1, 2022. | |
| (2) | Accrual of interest and amortization of the premium on December 31, 2022. | |
| (3) | The payment of interest on January 1, 2023. | |
| (4) | Accrual of interest and amortization of the premium on December 31, 2023. |
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
