On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020.

On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

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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