On January 1,2020 , Kane Corporation issued $1,000,000,5%,4-year bonds. The bonds were sold to yield...
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On January 1,2020 , Kane Corporation issued $1,000,000,5%,4-year bonds. The bonds were sold to yield an effective-interest rate of 4%. Interest is paid annually on December 31. The company uses the effective-interest method of amortization. Instructions: (Show computations, if possible) (a) Determine the issuance price of the bonds. (Round to the nearest dollar) (b) Prepare the journal entry to record the issuance of the bonds. (c) Prepare a bond discount amortization schedule which shows the amortization of discount for the first two interest payment dates. (Round to the nearest dollar) (d) Prepare the journal entries that Kane Corporation would make on December 31, 2020, and December 31,2021 related to the bonds. (e) On January 1, 2022, Kane retired the bonds at 101. Prepare the journal entries that Kane Corporation would make to record the bonds retirement. For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
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