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sdas [7]
2 years ago
11

Larkspur, Inc. issued $432,000, 7%, 20-year bonds on January 1, 2020, at 104. Interest is payable annually on January 1. Larkspu

r uses straight-line amortization for bond premium or discount. Prepare the journal entry to record the issuance of the bonds.
Business
1 answer:
kirill [66]2 years ago
3 0

Answer and Explanation:

The Journal entry to record the issuance of the bond is as follows:

Cash Dr  $449,280 ($432,000 × 1.04)

        To Bond payable $432,000

        To Premium on bond payable $17,280

(Being the issuance of the bond is recorded)

here the cash is debited as it increased the assets and credited the bond payable and the premium on bond payable as it also increased the liabilities

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For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) a single amount or
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Answer:

a. The present value of a future value of $10,000 is $7,310.

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Explanation:

a) Data and Calculations:

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c)  $1,000,000 in 40 years:

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PMT (Periodic Payment) $4,000.00

Starting Investment $0.00

Total Principal $160,000.00

Total Interest $876,226.07

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