Exercise 9-3 On January 1, 2017, Grouper Limited paid $547,697.67 for 13% bonds with a...
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Exercise 9-3 On January 1, 2017, Grouper Limited paid $547,697.67 for 13% bonds with a maturity value of $510,000. The bonds provide the bondholders with a 11% yield. They are dated January 1, 2017, and mature on January 1, 2022, with interest receivable on December 31 of each year. Grouper accounts for the bonds using the amortized cost approach, applies ASPE using the effective interest method, and has a December 31 year end. Prepare the journal entry to record the bond purchase. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Round answers to 2 decimal places, e.g. 52.75.) Date Account Titles and Explanation Debit Credit Jan 1, 2017 Prepare a bond amortization schedule. (Round answers to 2 decimal places, e.g. 52.75.) Schedule of Interest Income and Bond Premium Amortization Effective Interest Method Carrying Amount of Bonds Date Cash Received Interest Income Premium Amortization 01/01/17 12/31/17 12/31/18 12/31/19 12/31/20 12/31/21
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