Answered: (includes accrued interest). Give…

Business

Accounting

(includes accrued interest). Give entries through December 1, 2022. Prepare a bond amortization schedule

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Monty Co. sells $431,000 of 12% bonds on
June 1, 2020. The bonds pay interest on
December 1 and June 1. The due date of the
bonds is June 1, 2024. The bonds yield 8%.
On October 1, 2021, Monty buys back
$137,920 worth of bonds for $144,920
(includes accrued interest). Give entries
through December 1, 2022.
Prepare a bond amortization schedule using
the effective-interest method for discount
and premium amortization. Amortize
premium or discount on interest dates and at
year-end. (Round answers to 0 decimal
places, e.g. 38,548.)

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