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Prepare entry for extinguish at maturity

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Reference no: EM132531321

Bako Company issued $100,000 of 7% term bonds on January 1, 2019, due on January 1, 2024, with interest payable annually. Assuming that these bonds are issued to yield 8% and (or) 6% compounded annually.

Required

Question (1) Calculate the amount of interest that is actually paid annually.

Question (2) Calculate the bond proceeds.

Question (3) Prepare journal entry to records the issuance of bonds on January 1.

Question (4) Prepar a schedule of amortization of the discount and premium and total interest expense each year through year 5 using both effective-interest method and straight-line method.

Question (5) Record entries for interest payments and amortization of the discount and premium at the end of each year using effective-interest method and straight-line method.

Question (6) Show the statement of financial position presentation of bonds payable as of December 31, 2019 and 2020.

Question (7) Prepare entry for extinguish at maturity.

Reference no: EM132531321

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