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pleas explain the answer. thank you. South Carolina Beach Company has 6%, 10-year bonds payable that mature on June 30, 2028. The bonds are issued
pleas explain the answer. thank you.
South Carolina Beach Company has 6%, 10-year bonds payable that mature on June 30, 2028. The bonds are issued on June 30, 2018, and South Carolina Beach pays interest each June 30 and December 31 Requirements . 1. Will the bonds be issued at face value, at a premium, or at a discount if the market interest rate on the date of issuance is 5%? If the market interest rate is 8%? 2. South Carolina Beach issued $500,000 of the bonds at 90.5. Round all calculations to the nearest dollar. a. Record issuance of the bonds on June 30, 2018 b. Record the payment of interest and amortization of the discount on December 31, 2018. Use the straight-line amortization method. c. Compute the bonds' carrying amount at December 31, 2018. d. Record the payment of interest and amortization of discount on June 30, 2019. South Carolina Beach Company has 8%, 10-year bonds payable that mature on June 30, 2028. The bonds are issued on June 30, 2018, and South Carolina Beach pays interest each June 30 and December 31. Read the requirements Requirement 2. South Carolina Beach issued $500,000 of the bonds at 90.5. Round all calculations to the nearest dollar. a. Record issuance of the bonds on June 30, 2018. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) Date Accounts and Explanation Debit Credit 2018 (a) Jun 30 b. Record the payment of interest and amortization of the discount on December 31, 2018. Use the straight-line amortization method. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) Date Accounts and Explanation Debit Credit 2018 (b) Dec. 31 c. Compute the bonds' carrying amount at December 31, 2018. (Enter all amounts to the nearest whole dollar.) Carrying amount at December 31, 2018 Long-term Liabilities: Less: d. Record the payment of interest and amortization of discount on June 30, 2019. (Record debits first, then credits. Select explanations on the last line of the journal entry. Round your answers to the nearest whole dollar.) Date Accounts and Explanation Debit Credit 2019 (d) Jun 30Step by Step Solution
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