Solution-Prepare the journal entries to record sold the

Prepare the journal entries to record sold the bonds

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Reference no: EM132517404

Question - On January 1, 2016, Knorr Corporation issued $1,400,000 of 7%, 5-year bonds dated January 1, 2016. The bonds pay interest annually on December 31. The bonds were issued to yield 8%. Bond issue costs associated with the bonds totaled $21,540.76.

Required - Prepare the journal entries to record the following:

January 1, 2016 Sold the bonds at an effective rate of 8%.

December 31, 2016 First interest payment using the effective interest method.

December 31, 2016 Amortization of bond issue costs using the straight-line method.

December 31, 2017 Second interest payment using the effective interest method.

December 31, 2017 Amortization of bond issue costs using the straight-line method.

Reference no: EM132517404

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Prepare the journal entries to record sold the bonds

Reference no: EM132517404

Reference no: EM132517404

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