FA08Q7key - maturity of 10 years Interest is to be paid...

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Financial Accounting Quiz 7 Name: Fall 2008 1. Equipment with a cost of $90, an estimated life of 4 years, and an estimated residual value of $10 at the end of four years is to be depreciated. Complete the following table that compares three depreciation methods: straight-line, sum-of-the-years’ digits, and double-declining balance. Depreciation Expense Each Year Under 3 Different Methods Year Straight-line Sum-of-the-years’ digits Double-declining balance 1 2 3 4 2. B Company issues bonds with a par value of $1 million, a coupon rate of 12%, and a
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Unformatted text preview: maturity of 10 years. Interest is to be paid semi-annually at rate of 6%, with the first coupon payment to occur six months after the bonds are fist issued. So, there are a total of 20 periods. At the time the bonds were issued, the market rate for these bonds is 10%. a. Provide the initial journal at the time the bonds are first issued to record the proceeds received. b. Provide the journal entry at the time of the second coupon payment....
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