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20, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

20, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter14: Long-term Liabilities: Bonds And Notes
Section: Chapter Questions
Problem 6PEB
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On January 1, 2020, Teal Company purchased 9% bonds having a maturity value of $370,000, for $400,342.96. The bonds provide the bondholders with a 7% yield. They are dated January 1, 2020, and mature January 1, 2025, with interest received on January 1 of each year. Teal Company uses the effective-interest method to allocate unamortized discount or premium. The bonds are classified in the held-to-maturity category.

 

Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Cash Interest Premium Carrying Amo Date Received Revenue Amortized of Bonds 1/1/20 $ 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 %24 %24
Transcribed Image Text:Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 2,525.25.) Schedule of Interest Revenue and Bond Premium Amortization Effective-Interest Method Cash Interest Premium Carrying Amo Date Received Revenue Amortized of Bonds 1/1/20 $ 1/1/21 1/1/22 1/1/23 1/1/24 1/1/25 %24 %24
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