homework 14 - Ch 14 Homework Q1) The following amortization...

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Ch 14 – Homework Q1) The following amortization and interest schedule reflects the issuance of 3-year bond by Gerona Company on January 1, 2006. However, the schedule is not completely prepared. Interest is payable on June 30, and December 31. The company uses an effective market interest rate method to amortize discount (or premium) of bonds. Amortization schedule of bond payable Date Cash Interest Amount amortized Book value 1 / 1 /2006 126,290 6 / 30/2006 6,000 5,052 12/31/2006 6,000 5,013 6 / 30/2007 6,000 4,974 12/31/2007 6,000 4,933 6/ 30/2008 6,000 4,891 12/31/2008 6,000 4,846 Instructions (a) Indicate the face value of bond, stated interest rate and market interest rate applied to the above amortization schedule of bond payable(Show your works). (b) Prepare the journal entry to record the event on December 31, 2007 and December 31, 2008. Q2) On March 1, 2008, Pyne Furniture Co. issued $700,000 of 10 percent bonds to yield 8 percent. Interest is payable semiannually on February 28 and August 31. The bonds mature in ten
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homework 14 - Ch 14 Homework Q1) The following amortization...

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