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Accounting

Problem:

Hillside issues $1,200,000 of 8%, 15-year bonds dated January 1, 2013, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $1,036,935.

Required:

Question 1: Prepare the January 1, 2013, journal entry to record the bonds' issuance.

Question 2: For each semiannual period, compute (a) the cash payment, (b) the straight-line discount amortization, and (c) the bond interest expense.

Question 3: Determine the total bond interest expense to be recognized over the bonds' life.

Question 4: Prepare the first two years of an amortization table using the straight-line method

Question 5: Prepare the journal entries to record the first two interest payments.

Note: Provide support for your rationale.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164199

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