Question
RKO Company sold bonds with a face value of $850,000 for $909,701. The bonds have a coupon rate of 8 percent, mature in 10 years,
RKO Company sold bonds with a face value of $850,000 for $909,701. The bonds have a coupon rate of 8 percent, mature in 10 years, and pay interest annually every December 31.
All of the bonds were sold on January 1 of this year. Using a premium account, record the sale of the bonds on January 1 and the payment of interest on December 31 of this year. RKO uses the effective-interest amortization method. Assume an annual market rate of interest of 7 percent.
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Cost Accounting Foundations and Evolutions
Authors: Michael R. Kinney, Cecily A. Raiborn
8th Edition
9781439044612, 1439044619, 978-1111626822
