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Homework Session 18 Spring 2010

Homework Session 18 Spring 2010 - Homework Session 18...

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Homework Session 18 Spring 2010 M10–2 . Principal \$600,000 × 0.4564 = \$273,840 Interest \$ 24,000 × 13.5903 = 326,167 Issue Price = \$600,007* *Issue price should be exactly \$600,000. The \$7 difference is the result of rounding the present value factors at four digits. M10–3 . Principal \$900,000 × 0.4350 = \$391,500 Interest \$ 27,000 × 13.2944 = 358,949 Issue Price = \$750,449 M10–4. January 1, 2009: Cash (+A). .............................................................................. 940,000 Discount on Bonds Payable (+XL, -L). ................................... 60,000 Bonds Payable (+L). .......................................................... 1,000,000 June 30, 2009: Bond Interest Expense (+E, -SE) (\$940,000 × 11% × 1/2) . 51,700 Discount on Bonds Payable (-XL, +L). ............................... 1,700 Cash (-A) (\$1,000,000 × 10% × 1/2) . .............................. 50,000

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M10–5. January 1, 2009: Cash (+A). .............................................................................. 580,000 Discount on Bonds Payable (+XL, -L). ................................... 20,000 Bonds Payable (+L). ........................................................... 600,000 June 30, 2009: Bond Interest Expense (+E, -SE). .......................................... 31,000
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Homework Session 18 Spring 2010 - Homework Session 18...

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