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(a)
Bond: Bond is a debt instrument which provides the long term debt for the company and company pays the interest to its bondholders.
Amortization of Bonds: Bonds issued at discount or premium then the discounted or premium value is amortized from the contractual interest over a period of time and comes under the income statement.
Journalizing: It is the process of recording the transactions of an organization in a chronological order. Based on these journal entries recorded, the amounts are posted to the relevant ledger accounts.
Accounting rules for journal entries:
- To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.
- To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.
To prepare: The
(b)
To prepare: The amortization table for three interest period.
(c)
To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2017.
(d)
To prepare: The journal entry for the payment of interest.
(e)
To prepare: The journal entry of the accrual interest and amortization of discount on January 1, 2018.
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Chapter 15 Solutions
Accounting Principles - Standalone book
- Give true answer this financial accounting questionarrow_forwardI want to correct answer general accounting questionarrow_forwardAt the beginning of of the year, Lexington Corporation had total assets of $920,000 and total liabilities of $580,000. During the year, total liabilities increased by $120,000, and stockholders' equity decreased by $80,000. What is the amount of total assets at the end of the year?arrow_forward
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- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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