Question
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010, a yield of 12%. Novak uses the effective-interest method
On June 30, 2017, Novak Company issued $4,400,000 face value of 13%, 20-year bonds at $4,731,010, a yield of 12%. Novak uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest on June 30 and December 31.
Prepare the journal entries to record the following transactions:
1.) The issuance of bonds on June 30, 2017.
2.) The payment of interest and the amortization of the premium on December 31, 2017. |
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3.) The payment of interest and the amortization of the premium on June 30, 2018.
4.) The payment of interest and the amortization of the premium on December 31, 2018 |
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