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Harlamova29_29 [7]
3 years ago
5

Garcia Company issues 11.0%, 15-year bonds with a par value of $440,000 and semiannual interest payments. On the issue date, the

annual market rate for these bonds is 9.0%, which implies a selling price of 114. Prepare the journal entry for the issuance of these bonds for cash on January 1.
Business
1 answer:
podryga [215]3 years ago
8 0

Answer:

Entries are given below

Explanation:

The entry that should be made on January 1 would be

Cash                                 501,600(w1)            Debit

Premium on bonds         61600(w2)              Credit      

Bonds payable                440000                   Credit      

<u>Working 1 </u>

Cash proceeds = $440,000/100 x $114

Cash proceeds = $501600

<u>Working 2 </u>

Premium = selling price of bond - Face value of the bond

Premium =  $501,600 - $440,000

Premium = 61600

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4 years ago
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Answer:

Check the explanation

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Kindly check the step by step explanation in the attached images below to get the solution to the question

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Indiana Co. began a construction project in 2018 with a contract price of $161 million to be received when the project is comple
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