Prepare a journal entry to record bond interest accrued
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On August 1, 2007, a company issues bonds with a par value of $600,000. The bonds mature in 10 years, and pay 6% annual interest, payable each February 1 and August 1. The bonds sold at $632,000. The company uses the straight-line method of amortizing bond premiums. The company's year-end is December 31. Prepare the general journal entry to record the interest accrued at December 31, 2007.
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Solution Summary
The solution prepares a journal entry to record bond interest accrued at December 31, 2007.
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Date of issue August 1, 2007
Face value $600,000
Premium $32,000
Bond maturity 10 years
Coupon rate 6%
Annual interest= ...
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