Question
The Pepsi Company issued on January 1, 2018, 10.000.000 lek bonds with nominal interest 13%. They pay interest twice a year on June 30 and
The Pepsi Company issued on January 1, 2018, 10.000.000 lek bonds with nominal interest 13%. They pay interest twice a year on June 30 and December 31 and have a term of 5 years. Required: 1. If the bonds are sold for 10,245,871 ALL with an effective interest rate of 12%, make the journal entries of the: a. Sale of bonds b. Payment of interest for 2018 using the effective interest method 2. If the bonds are sold at 9,761,671 ALL with an effective interest rate of 14%, make the journal entries of the: a. Sale of bonds b. Payment of interest for 2018 using the effective interest method
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