1. Compute the amount of cash Rahman Co. received on 1/1/2016. Prepare an amortization table for 2016 through 2020 for the bonds. Assume amortization is recorded on interest payment dates. Give all journal entries Rahman Co. entered for the years 2016 through 2020. 2. 3.

1. Compute the amount of cash Rahman Co. received on 1/1/2016. Prepare an amortization table for 2016 through 2020 for the bonds. Assume amortization is recorded on interest payment dates. Give all journal entries Rahman Co. entered for the years 2016 through 2020. 2. 3.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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Question

On January 1, 2016, Rahman Co. issued five-year bonds with a face value of $ 100,000 and a
stated interest rate of 10%, payable semiannually on June 30 and December 31. Assume that the
bonds were sold to yield 8%.
Required:
1.
Compute the amount of cash Rahman Co. received on 1/1/2016.
Prepare an amortization table for 2016 through 2020 for the bonds. Assume amortization
is recorded on interest payment dates.
Give all journal entries Rahman Co. entered for the years 2016 through 2020.
2.
3.
4.
Show how the bonds were shown on the financial statements of Rahman Co. on
12/31/2016 and 12/31/2017. Do not forget to show income statement effects.
What will be the maturity value of the bonds on 1/1/2021?
5.

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