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✔Your answer is correct. epare the journal entry to record the issuance of the bonds on January 1, 2027. (Credit account titles are automatically inc en the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for mounts.)

✔Your answer is correct. epare the journal entry to record the issuance of the bonds on January 1, 2027. (Credit account titles are automatically inc en the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for mounts.)

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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On January 1, 2027, Sunland Corporation issued $3,520,000 face value, 10%, 10-year bonds at $3,312,699. This price resulted in an effective interest rate of 11% on the bonds. Sunland uses the effective-interest method to amortize bond premium or discount. The bonds pay interest each January 1. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2027. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Jan. 1 Cash Discount on Bonds Payable Bonds Payable Debit 3312699 207301 Credit 3520000
Transcribed Image Text:On January 1, 2027, Sunland Corporation issued $3,520,000 face value, 10%, 10-year bonds at $3,312,699. This price resulted in an effective interest rate of 11% on the bonds. Sunland uses the effective-interest method to amortize bond premium or discount. The bonds pay interest each January 1. (a) Your answer is correct. Prepare the journal entry to record the issuance of the bonds on January 1, 2027. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Account Titles and Explanation Jan. 1 Cash Discount on Bonds Payable Bonds Payable Debit 3312699 207301 Credit 3520000
(b) (b) Prepare an amortization table through December 31, 2029 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.) Annual Interest Periods Issue date S Interest to Be Paid Interest Expense to Be Recorded SUNLAND CORPORATION Bond Discount Amortization Effective-Interest Method-Annual Interest Payments Prepare an amortization table through December 31, 2029 (three interest periods) for this bond issue. (Round answers to 0 decimal places, eg. 15,250) SUNLAND CORPORATION Bond Discount Amortization Effective-Interest Method-Annual Interest Payments Discount Amortization Interest Expense to Be Recorded 110 Discount Amortization Unamortized Discount Bond Carrying Value Unamor Disco
Transcribed Image Text:(b) (b) Prepare an amortization table through December 31, 2029 (three interest periods) for this bond issue. (Round answers to 0 decimal places, e.g. 15,250.) Annual Interest Periods Issue date S Interest to Be Paid Interest Expense to Be Recorded SUNLAND CORPORATION Bond Discount Amortization Effective-Interest Method-Annual Interest Payments Prepare an amortization table through December 31, 2029 (three interest periods) for this bond issue. (Round answers to 0 decimal places, eg. 15,250) SUNLAND CORPORATION Bond Discount Amortization Effective-Interest Method-Annual Interest Payments Discount Amortization Interest Expense to Be Recorded 110 Discount Amortization Unamortized Discount Bond Carrying Value Unamor Disco
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