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    Corporations

    Question

    journal entries for bonds?
    On January 1, 2008, a corporation issued $150,000, 8%, 10-year bonds, dated January 1, 2008, at 98. The bonds pay interest semiannually on January 1 and July 1. The company uses the straight-line method of amortization and has a calendar year end. Prepare the journal entries that the corporation would make related to the bond issue on the dates below: a. January 1, 2008 b. July 1, 2008
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    a. January 1, 2008 Dr Cash $147,000 ($150,000 x 0.98) Dr Discount on bonds payable $3,000 (amortized over 20 periods) Cr Bonds payable $150,000 (always face value) b. July 1, 2008 Dr Interest expense $6,150 Cr Discount on bonds payable $150 ($3,000/20) Cr Cash $6,000 ($150,000 x 8% x 1/2)
    a few seconds ago

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