Vaughn Corporation enters into a 6-year lease of equipment on December 31, 2019, which requires 6 annual payments of $41,600 each, beginning December 31, 2019. In addition, Vaughn guarantees the lessor a residual value of $19,800 at the end of the lease. However, Vaughn believes it is probable that the expected residual value at the end of the lease term will be $9,900. The equipment has a useful life of 6 years.

How to journalize the purchase of bonds.

Question Content Area The journal entry a company makes for the issuance of bonds when the contract rate is less than the market rate would be a. debit Cash, credit Premium on Bonds Payable and Bonds Payable b. debit Cash, credit Bonds Payable c. debit Cash and Discount on Bonds Payable, credit Bonds Payable d. debit Bonds Payable, credit Cash

How are the bonds issued, what is the appropriate journal entry? Provide example for issuing bonds. How do we determine the present value of a bond when market rate differs from its contract rate? How do we record the interest payment (provide examples for both premium and discount amortization), using the effective interest method? What is the difference between the effective interest method and the straight line method when amortizing either a discount or a premium? Cite and give credit to the author that you are citing.