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Question 10: On January 1, 2018, Splash City issues $450,000 of 7% bonds, due in 10...

Question 10:

On January 1, 2018, Splash City issues $450,000 of 7% bonds, due in 10 years, with interest payable semiannually on June 30 and December 31 each year.
Assuming the market interest rate on the issue date is 8%, the bonds will issue at $419,423.

2. Record the bond issue on January 1, 2018, and the first two semiannual interest payments on June 30, 2018, and December 31, 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

  • Record the bond issue.

  • Record the first semiannual interest payment

  • Record the second semiannual interest payment.

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Answer #1

Notes:

Bond Amortisation schedule:

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