On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bondsmature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does notuse a discount account. Assume an annual market rate of interest of 10 percent. (EY of $1. PV of $1. EVA of $1. and PVA of $1)Note: Use appropriate factor(s) from the tables provided.Required:1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year.3. What bonds payable amount will Clearwater report on its December 31 balance sheet?Complete this question by entering your answers in the tabs below.Required 1and 2Required 3Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round yourintermediate calculations and final answers to whole dollars.General JournalNo12DateJanuary 01December 31CashBond discountAnswer is not complete.Bonds payableInterest expenseBond discountCashRequired 1 and 7XXRequired 3 >Debit881,181Credit780,000

Bond issuance involves a company selling bonds to raise capital. Amortization, particularly in…

On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. (EV of $1. PV of S1. EVA of $1. and PVA of SD) Note: Use appropriate factor(s) from the tables provided. Required: 1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. 3. What bonds payable amount will Clearwater report on its December 31 balance sheet?

On January 1 of this year, Clearwater Corporation sold bonds with a face value of $780,000 and a coupon rate of 9 percent. The bonds mature in 10 years and pay interest annually every December 31. Clearwater uses the straight-line amortization method and does not use a discount account. Assume an annual market rate of interest of 10 percent. (EV of $1. PV of S1. EVA of $1. and PVA of SD) Note: Use appropriate factor(s) from the tables provided. Required: 1.82. Prepare the journal entry to record the issuance of the bonds and the interest payment on December 31 of this year. 3. What bonds payable amount will Clearwater report on its December 31 balance sheet?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 15MCQ

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