A Company Issued 10-Year,9% Bonds with a Par Value of $500,000

question 140

Essay

A company issued 10-year,9% bonds with a par value of $500,000 when the market rate was 9.5%.The company received $484,087 in cash proceeds.Using the effective interest method,prepare the issuer's general journal entry to record the first annual interest payment and the amortization of any bond discount or premium.

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Definitions:

Production

The process of creating goods and services by combining labor, materials, and technology.

Kegs

Large barrels used to store and transport liquids, especially alcoholic beverages such as beer.

Pizzas

A popular dish made from yeasted flatbread typically topped with tomato sauce, cheese, and various toppings and then baked.

Mutual Gains

A situation or outcome in negotiation or economics where all parties involved benefit or profit.