Rayco corporation had the following bond transactions, Ask an Expert

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Rayco Corporation had the following bond transactions during the fiscal year 2014:

On January 1: issued ten (10), $1,000 bonds at 103 The 5-year bonds, is dated January 1, 2014. The contract interest rate is 7.0% Straight-line amortization method is used. Interest is payable semi-annual on January 1 and July 1.

On July 1: Rayco Corporation issued $500,000 of 9.0% , 10-year bonds. The bonds dated January 1, 2014 were issued at 89.5 , and pay interest on July 1 and January 1. Effective interest rate method is used for these bonds is 11.0%

On October 1: issued 10-year bonds $10,000 face value bonds for cash $10,950 The bonds have a stated rate of 8%, but an effective rate of 6.0% Effective-interest method is used. Interest is payable on October 1 and April 1.

Requirements: Prepare all general journal entries for the three bonds issued and any interest accruals and payments for the fiscal year 2014. (Round all calculations to nearest whole dollar. Must show all calculations)

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91968943

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