Chowan Corporation issued $115,000 of 9% bonds dated January 1, 2019, for $111,283.65 on January 1, 2019. The bonds are due December 31, 2019, were issued to yield 10%, and pay interest semiannually on June 30 and December 31. Chowan uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on January 1, 2019, and the interest payments on June 30, 2019, December 31, 2019, and June 30, 2020. In addition, prepare a bond interest expense and discount amortization schedule for the bonds through June 30, 2020. Prepare a bond interest expense and discount amortization schedule for the bonds through June 30, 2020. CHOWAN CORPORATION Bond Interest Expense and Discount Amortization Schedule (Partial) Effective Interest Method 9% Bonds Sold to Yield 10% Date Cash Credit Interest Expense Debit Unamortized Discount Credit Book Value of Bonds 01/01/19
Chowan Corporation issued $115,000 of 9% bonds dated January 1, 2019, for $111,283.65 on January 1, 2019. The bonds are due December 31, 2019, were issued to yield 10%, and pay interest semiannually on June 30 and December 31. Chowan uses the effective interest method of amortization. Required: Prepare the journal entries to record the issue of the bonds on January 1, 2019, and the interest payments on June 30, 2019, December 31, 2019, and June 30, 2020. In addition, prepare a bond interest expense and discount amortization schedule for the bonds through June 30, 2020. Prepare a bond interest expense and discount amortization schedule for the bonds through June 30, 2020. CHOWAN CORPORATION Bond Interest Expense and Discount Amortization Schedule (Partial) Effective Interest Method 9% Bonds Sold to Yield 10% Date Cash Credit Interest Expense Debit Unamortized Discount Credit Book Value of Bonds 01/01/19
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...
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Chowan Corporation issued $115,000 of 9% bonds dated January 1, 2019, for $111,283.65 on January 1, 2019. The bonds are due December 31, 2019, were issued to yield 10%, and pay interest semiannually on June 30 and December 31. Chowan uses the effective interest method of amortization.
Required:
| Prepare the |
Prepare a bond interest expense and discount amortization schedule for the bonds through June 30, 2020.
| CHOWAN CORPORATION | ||||
| Bond Interest Expense and Discount Amortization Schedule (Partial) | ||||
| Effective Interest Method 9% Bonds Sold to Yield 10% | ||||
| Date | Cash Credit | Interest Expense Debit | Unamortized Discount Credit | Book |
| 01/01/19 |
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| 6/30/19 |
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| 12/31/19 |
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| 6/30/20 |
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