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How the bond interest expense and the bonds payable

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Reference no: EM132752044

On January 1, 2018, Bochini Corporation sold a $10 million, 8.25 percent bond issue. The bonds were dated January 1, 2018, had a yield of 8 percent, pay interest each December 31, and mature 10 years from the date of issue.

Required:

Problem 1) Complete the chart below. Use the tables for issue price

Date Cash Payment Interest Expense Amortization Carrying Value
Jan 1,2018
Dec 31,2018
Dec 31,2019

Problem 2) Prepare the journal entry to record the issuance of the bonds.

Problem  3) Prepare the journal entry to record the interest payment on December 31, 2018. Use effective-interest amortization.

Problem 4) Show how the bond interest expense and the bonds payable should be reported on the annual financial statements for 2018.

Reference no: EM132752044

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