Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company...
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Amortize Discount by Interest Method On the first day of its fiscal year, Ebert Company issued $13,000,000 of 5 -year, 11% bonds to finance its operations. Interest is payable semiannually. The bonds were issued at a market (effective) interest rate of 13%, resulting in Ebert Company receling cash of $12,065,503. The company uses the interest method. a. Journalize the entries to record the following: -1. Sale of the bonds. Round amounts to the nearest doliar. If an amount box does not require an entry, leave it blank. Fecdback Theck My Work As the discount or premium is amortized, the carrying amount of the bond changes. As a result, interest expense also changes each period. First semiannual interest payment, including amortization of discount. Round to the nearest dollar. If an amount box do ot require an entry, leavit blank. ECinck Mr Woks 3. Cash recelved (+ discount amortized) x semiannual market rate x time = interest expense (debit). Principal x. semiannual contract rate x time = eash paid (credit). The discount antortized (credit) is the difference between the two amounts
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