Question
On January 1, 20XX, Cisco Corporation issued a $600,000, 9%, 5-year bond for $576,834. The bonds were sold to yield an effective interest rate of
On January 1, 20XX, Cisco Corporation issued a $600,000, 9%, 5-year bond for $576,834.
The bonds were sold to yield an effective interest rate of 10%.
Interest is paid annually on January 1.
The company uses the effective interest method of amortization.
Instructions: prepare a bond amortization schedule, that shows the first three interest payment dates and prepare the journal entries for issuing the bond on January 1, the December 31 adjusting entry and January 1 payment of interest.
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Financial & Managerial Accounting For Undergraduates
Authors: Jason Wallace, James Nelson, Karen Christensen, Theodore Hobson, Scott L. Matthews
2nd Edition
161853310X, 9781618533104
