11-p11-6a

# 11-p11-6a - Name: Date: Instructor: Course: Financial...

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FileName: 0fb17510b6f44a0851abd18a98c6906e0d7c7780.xls , Tab: Problem P11-6A, Page 1 of 2, 10/06/2009, 03:41:20 Name: Date: Instructor: Course: \$3,600,000 face value 9% 10 year bonds at \$3,375,680 This price resulted in an effective-interest rate of 10% on bonds. Kingston uses the effective- interest method of amortize bond premium or discount. The bonds pay semiannual interest July 1 and January 1. Instructions: 07/01/06 Cash 3,375,680 Discount on Bonds Payable 224,320 Account title 3,600,000 12/31/06 Bond Interest Expense 168,784 Discount on Bonds Payable 6,784 Bond Interest Payable 162,000 07/01/07 Bond Interest Expense 169,123 Discount on Bonds Payable 7,123 Cash 162,000 12/31/07 Bonds Interest Expense 169,479 Discount on Bonds Payable 7,479 Bonds Interest Payable 162,000 KINGSTON SATELLITES Bond Discount Amortization Effective-Interest Method—Semiannual Interest Payments 9% Bonds Issued at 10% (A) (B) (C) (D) (E) Issue date \$224,320 \$3,375,680 1 \$162,000 \$168,784 \$6,784 217,536 3,382,464 2 162,000 169,123 7,123 210,413 3,389,587 3 162,000 169,479 7,479 202,934

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## This note was uploaded on 04/04/2009 for the course ACC 321 taught by Professor Ahmedmokhtar during the Spring '09 term at Ain Shams University.

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11-p11-6a - Name: Date: Instructor: Course: Financial...

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