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Southwest Corporation issued bonds with the following details: Face value: $650,000 Interest: 8 percent per year payable each December 31 Terms: : Bonds dated January
Southwest Corporation issued bonds with the following details: Face value: $650,000 Interest: 8 percent per year payable each December 31 Terms: : Bonds dated January 1, 2018, due five years fron that date The annual accounting period ends December 31. The bonds were issued at 105 on January 1, 2018, when the market interest rate was 7 percent. Assume the company uses straight-line amortization and adjusts for any rounding errors when recording interest expense in the final year. Required: 1. Compute the cash received from the bond issuance in dollars. TIP The issue price typically is quoted at a percentage of face value the issuance of the bonds and the payment of interest on December 31, 2018 and 2019 uld be reported on the balance sheets at December 31, 2018 and 2019 2. & 3. Prepare the journal entry to record 4-a. How much interest expense would be reported on the income statements for 2018 and 2019? 4-b. Compute the bond value which sho
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