The Won-Ton Corporation issues $500,000 of 6%, 2 year bonds dated January 1, 2021, that...
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Accounting
The Won-Ton Corporation issues $500,000 of 6%, 2 year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $480,000. Thus, there is a discount of $20,000. 1) Calculate the cash payment, the straight-line discount amortization, and the bond interest expense for each semi-annual period. (This will be the same entry over- and-over again). Prepare an amortization table for the 4 periods. Here's the form you should use for your amortization schedule: Column A - Semi-annual interest period; B - Unamortized Discount; Column C - Carrying Value 2) Prepare a journal entry for the first payment of interest and amortization. (This entry would be the same for the next 3 periods so you don't need to prepare it more than once.)
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