Solution-Prepare a serial bond discount amortization

Prepare a serial bond discount amortization

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Reference no: EM13871199

On July 1, 2010, the Hubbard Corporation issued $600,000 of bonds with an 8% face rate of interest. The bonds were issued for $589,381.93, pay interest semiannually on June 30 and December 31, carry an effective yield rate of 9%, and are payable in three annual installments of $200,000 each, beginning June 30, 2011.

Required:
1. Prepare a serial bond discount amortization schedule using the bonds outstanding method.
2. Prepare a serial bond discount amortization schedule using the effective interest method.
3. Prepare the journal entries necessary to record the payment of interest and the bond retirements on June 30, 2011, June 30, 2012, and June 30, 2013, using
(a) The bonds outstanding method, and

(b) The effective interest method.

Reference no: EM13871199

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Prepare a serial bond discount amortization

Reference no: EM13871199

Reference no: EM13871199

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