Splish Brothers Corporation issued $580.000, 6%, 20-year bonds on January 1, 2020, for $518,555. This price resulted in an effective-interest rate of 7% on the bonds. Interest is payable annually on January 1. Splish Brothers uses the effective-interest method to amortize bond premium or discount. Part 1 Prepare the journal entry to record the issuance of the bonds. (Round answers to O decimal places, eg 15.250. Credit account titles are automatically indented when amount is entered. Do not indent manually ) Date Account Titles and Explanation Debit Credit Jan. 1. 2020

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Splish Brothers Corporation issued $580.000, 6%, 20-year bonds on January 1, 2020, for $518,555. This price resulted in an
effective-interest rate of 7% on the bonds. Interest is payable annually on January 1. Splish Brothers uses the effective-interest
method to amortize bond premium or discount.
Part 1
Prepare the journal entry to record the issuance of the bonds. (Round answers to O decimal places, es. 15,250. Credit account titles
are automatically indented when amount is entered. Do not indent manually.)
Date
Account Titles and Explanation
Debit
Credit
Jan, 1.
2020
A) Prepare the journal entry to record the issuance of the bonds.
B) Prepare the journal entry to record the accrual of interest and the discount amortization on December
31, 2017.
C) Prepare the journal entry to record the payment of interest on January 1, 2018.
Transcribed Image Text:Splish Brothers Corporation issued $580.000, 6%, 20-year bonds on January 1, 2020, for $518,555. This price resulted in an effective-interest rate of 7% on the bonds. Interest is payable annually on January 1. Splish Brothers uses the effective-interest method to amortize bond premium or discount. Part 1 Prepare the journal entry to record the issuance of the bonds. (Round answers to O decimal places, es. 15,250. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Debit Credit Jan, 1. 2020 A) Prepare the journal entry to record the issuance of the bonds. B) Prepare the journal entry to record the accrual of interest and the discount amortization on December 31, 2017. C) Prepare the journal entry to record the payment of interest on January 1, 2018.
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