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Chapter 14 -Long term Liabilities Problem 14-2 (Issuance and Redemption of bonds) Venezuela Co. is building...
Chapter 14 -Long term Liabilities
Problem 14-2
(Issuance and Redemption of bonds) Venezuela Co. is building a new hockey arena at a cost of $2,500,000. It received a down payment of $50,000 from local businesses to support the project, and now needs to borrow $2000,000 to complete the project. It therefore decides to issue $2000,000 of 10.5%, 10-year bonds. These bonds were issued on January 1, 2016 and pay interest annually on each January 1. The bond yield 10%.
Instructions: a) prepare a journal entry to record the issuance of bonds on January 1. 2016
b) prepare a bond amortization schedule up to and including January 1, 2020 using the effective interest method.
c) Assume that on July 1, 2019, Venezuela Co. redeems half of the bonds at a cost of $1,065,000plus the accrued interest. Prepare the journal entry to record this redemption.
Solutions
ekkarill92 answered 1 year agoRelated Solutions
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Your answer is partially correct. Try again.
Assume that on July 1,...
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Problem 14-2
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Prepare the journal entry to record the issuance of the bonds on...
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from local
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.
Instructions:
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1.1.1.1 (a)
Your answer is correct. Prepare the journal...
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