The following data relate to an $8,000,000, 7% bond issue for a selected semiannual interest period: Bond
Question:
Bond carrying amount at beginning of period .... $8,190,000
Interest paid at end of period ............. 560,000
Interest expense allocable to the period ......... 540,500
a. Were the bonds issued at a discount or at a premium?
b. What expense account was decreased to amortize the discount or premium?
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a The bonds issued at a Premium When a bond sells at a price above its face value it is a p...View the full answer
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