On may 1 2007 gipson corp. purchased 450000 of 12 bonds, Ask an Expert

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On May 1, 2007, Gipson Corp. purchased $450,000 of 12% bonds, interest payable on January 1 and July 1, for $422,800 plus accrued interest. The bonds mature on January 1, 2013. Amortization is recorded when interest is received by the straight-line method (by months and round to the nearest dollar). (Assume bonds are available for sale.)

Instructions:

(a) Prepare the entry for May 1, 2007.

(b) The bonds are sold on August 1, 2008 for $425,000 plus accrued interest. Prepare all entries required to properly record the sale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M990884

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