OnJanuary1,2016,theQ-BallCompanyissued$200,000bondswithan8%statedinterestrate.Each$1,000bonds payinterestonJune30andDecember31.ThebondsmatureonDecember31,2025. Required : a. Assumethebondsweresoldfor$175,075.58toyield10%.Prepareabondamortization scheduleforthefirstyearofthebondlifeusingtheeffectiveinterestmethod.Roundall calculationstothenearestdollar. b. PreparethejournalentryforpayingtheinterestonDecember31,2016. c. Whydidthesebondsoriginallysellatadiscount? **PLEASE SHOW ALL WORK &
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Question:
OnJanuary1,2016,theQ-BallCompanyissued$200,000bondswithan8%statedinterestrate.Each$1,000bonds payinterestonJune30andDecember31.ThebondsmatureonDecember31,2025.
Required:
a. Assumethebondsweresoldfor$175,075.58toyield10%.Prepareabondamortization scheduleforthefirstyearofthebondlifeusingtheeffectiveinterestmethod.Roundall calculationstothenearestdollar.
b. PreparethejournalentryforpayingtheinterestonDecember31,2016.
c. Whydidthesebondsoriginallysellatadiscount?
**PLEASE SHOW ALL WORK & CALCULATIONS**
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