Answered: Part B. - At the beginning of 2016, Comapny A issued a bond as a means of financing a new long-term compensation contract for Professor Q. The 8%, 10 year,…

FINANCIAL ACCOUNTING

10th Edition

ISBN: 9781259964947

Author: Libby

Publisher: MCG

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

100%

Part B. - At the beginning of 2016, Comapny A issued a bond as a means of financing a new long-term

compensation contract for Professor Q. The 8%, 10 year, $100,000 bonds (with semi-annual

interest) were issued to yield 10%. Assume that the bond was issued at 87 (i.e. 87 percent of face

value, or $87,000). Since the bond price is given, do NOT compute the bond price.

Required:
A. Prepare a bond amortization schedule for the first interest payments (make sure
that you report all amounts needed for the interest journal entry and the bond's carrying value).
Amortization Carrying Value
Payment
Number
Begin. 2016
First Payment
Second Payment
Interest
Expense
Cash Paid

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