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Chapter+10+Examplesblank - Chapter 10 Examples *Ex. 275...

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Chapter 10 Examples *Ex. 275 Shannon Company issued $500,000, 8%, 10-year bonds on December 31, 2009, for $480,000. Interest is payable annually on December 31. Shannon uses the straight-line method to amortize bond premium or discount. Instructions Prepare the journal entries to record the following events. (a) The issuance of the bonds. (b) The payment of interest and the discount amortization on December 31, 2010. (c) The redemption of the bonds at maturity, assuming interest for the last interest period has been paid and recorded. Ans: N/A, SO: 5,6,8, Bloom: AP, Difficulty: Medium, Min: 5, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA *Solution 275 (5 min.) 2009 (a) Dec. 31 Cash 480,000 Discounts of Bonds Payable. .................................... 20,000 Bonds Payable. ........................................................ 500,000 2010 (b) Dec. 31 Bond Interest Expense. ............................................ 42,000
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Chapter+10+Examplesblank - Chapter 10 Examples *Ex. 275...

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