Prepare entries of record the interest receipt

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Question - Windsor devices Inc, purchased $500,000 of 8% bonds on January 1, 19XX for $437,689. The bonds have a 10 year life, pay semi-annual interest each June 30 and December 31, and were priced to generate a 10% effective interest rate.

Required -

a: Prepare Windsor's journal entry to record the bond purchase on January 1.

b: Prepare entries of record the interest receipt and discount amortization on June 30 and December 31. Windsor uses effective interest method of amortization.

c: Compute total interest revenue for 19XX.

d: Present the proper disclosure of the bond investment on Windsor's December 31, 19XX, balance sheet.

Reference no: EM133159313

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