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solutions Problem 9 - BONDS use Anwee Sheet, Kornet Co. producent Peeted by Kome l le graphite for golf club. The following transactions were com-
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Problem 9 - BONDS use Anwee Sheet, Kornet Co. producent Peeted by Kome l le graphite for golf club. The following transactions were com- omet ce, whose Becal year is the calendar year 1. Lued $19,000,000 of even-year, 12% allable bonds dated July 1, 2007, elective rate of 10%, receiving cash of $20,880,780. Interest is payable remi annually on December 31 and June 30. Dec. 31. Paid the semiannual interest on the bonds. 31. Recorded hand Recorded bond premium amortization of $134,341, which was determined by using the straight-line method. 31. Closed the interest expense account. June 30. Paid the semiannual interest on the bonds. Dec. 31. Paid the semiannual interest on the bonds. Dec. 31. Recorded bond premium amortization of $268.682, which was determined by using the straight-line method. 31. Closed the interest expense account 2009 July 1. Recorded the redemption of the bonds, which were called at 101.5. The balance in the bond premium account is $1,343,416 Lter the payment of interest and amortization of premium have been recorded. (Record the redemption only) Instructions 1. Journalize the entries to record the foregoing transactions 2. Indicate the amount of the interest expense in (a) 2007 and (b) 2008. 3. Determine the carrying amount of the bonds as of December 31, 2006Step by Step Solution
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