Problemsiburo company issued 300000 11 10 year bond on, Ask an Expert

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Problem:

Siburo Company issued $300,000, 11%, 10 year bond on January 1, 2010 for $318,694. This price resulted in an effective interest rate of 10% on the bonds. Interest is payable semiannualy on July 1 and January 1. Siburo uses the effective interest metod to amortize bond premium or discount.

Required:

Question: Prepare the journal entries to record the following (Round to the nearest dollar).

(a) The issuance of the bonds.

(b) The payment of interest and the premium amortization on July 1, 2010, assuming that interest was not accrued on June 30.

Note: Please show basic calculation

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91164424

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