Question
Tranquility, Inc. is authorized to issue 9%, 10-year bonds payable. On January 1, 2024, when the market interest rate is 12%, the company issues $600,000
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Tranquility,
Inc. is authorized to issue
9%,
10-year bonds payable. On January 1,
2024,
when the market interest rate is
12%,
the company issues
$600,000
of the bonds. The bonds pay interest semiannually.
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(Click the icon to view Present Value of Ordinary Annuity of $1 table.)
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(Click the icon to view Future Value of Ordinary Annuity of $1 table.)Read the requirements
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Requirement 1. How much cash did the company receive upon issuance of the bonds payable? (Round to the nearest dollar.)
| Upon issuance of the bonds payable, the company received |
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Requirement 2. Prepare an amortization table for the bond using the effective-interest method, through the first two interest payments. (Round to the nearest dollar.)
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| Interest |
| Carrying |
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| Cash Paid | Expense | Amortized | Amount |
| 01/01/2024 |
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| 06/30/2024 |
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| 12/31/2024 |
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Requirement 3. Journalize the issuance of the bonds on January 1,
2024,
and the first and second payments of the semiannual interest amount and amortization of the bonds on June 30,
2024
and December 31,
2024.
Explanations are not required. (Record debits first, then credits. Exclude explanations from any journal entries.)
Journalize the issuance of the bonds.
| Date | Accounts | Debit | Credit | ||
| 2024 |
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| Jan. 1 |
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Journalize the payment of the first semiannual interest amount and amortization of the bond on June 30,
2024.
| Date | Accounts | Debit | Credit | ||
| 2024 |
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| Jun. 30 |
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Journalize the payment of the second semiannual interest amount and amortization of the bond on December 31,
2024.
| Date | Accounts | Debit | Credit | ||
| 2024 |
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| Dec. 31 |
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Conservation Easement IRS Audit Techniques Guide
Authors: Internal Revenue Service
1st Edition
1304133923, 978-1304133922
