Question
Problem 3: Bond Issuance, Effective Interest, Extinguishment of Debt Omnidebt Corp. issued $50,000,000 of 6%, 15-year bonds on November 1, 2000. The bonds are callable
Problem 3: Bond Issuance, Effective Interest, Extinguishment of Debt
Omnidebt Corp. issued $50,000,000 of 6%, 15-year bonds on November 1, 2000. The bonds are callable at 99 at any time. At the time of issuance, the market rate for similar bonds was 7%. Interest is paid each June 30 and December 31. Omnidebt Corp, employs the effective interest method on its bonds.
3.1: Record the issuance of the bonds on November 1, 2000.
3.2: Record the interest payment on December 31, 2000.
3.3: Record the interest payment on June 30, 2001.
3.4: On July 1, 2001, Omnidebt Corp. repurchased all of the bonds at the call price. Record the journal entry to extinguish the debt.
*There is NO Present Value Table* All information is provided!
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