Journal entry to record the issuance of the bonds

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Reference no: EM13756013

On July 1, 2011, Atwater Corporation issued $2,000,000 face value, 10%, 10-year bonds at $2,271,813. This price resulted in an effective-interest rate of 8% on the bonds. Atwater uses the effective-interest method to amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1.

Prepare the journal entry to record the issuance of the bonds on July 1, 2011
Prepare an amortization table through December 31, 2012 (3 interest periods) for this bond issue.
Prepare the journal entry to record the accrual of interest and the amortization of the premium
Prepare the journal entry to record the payment of interest and the amortization of the premium on July 1, 2012, assuming no accrual of interest on June 30.
Prepare the journal entry to record the accrual of interest and the amortization of the premium on December 31, 2012.

Reference no: EM13756013

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