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Untitled Document33 - premium on bonds payable for $1,246....

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Bonds issued at a premium On July 1, Lighting Process, Inc. issues $10,000 ten-year bonds, with a coupon  rate of interest of 12% and semiannual interest payments payable on June 30  and December 31, when the market interest rate is 10%. The entry to record the  issuance of the bonds increases (debits) cash for the $11,246 received, increases  (credits) bonds payable for the $10,000 maturity amount, and increases (credits) 
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Unformatted text preview: premium on bonds payable for $1,246. Premium on bonds payable is a contra account to bonds payable that increases its value and is added to bonds payable in the long-term liability section of the balance sheet . General Journal Date Account Title and Description Ref. Debit Credit 20X1 July 1 Cash 11,246 Bonds Payable 10,000 Premium on Bonds Payable 1,246 Issue bonds at a premium...
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This note was uploaded on 12/25/2011 for the course FIN 3312 taught by Professor Staff during the Spring '08 term at Texas State.

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