Final 6 - principle $200,000 x 0.75131 = 150,262 present...

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Question 6 Needs Grading On February  1, 2011, Fox  Corporation  issued 9%  bonds dated  February 1,  2011, with a  face amount  of $200,000  and mature in  20 years. The  effective  interest rate  for these  bonds was  10%. Interest  is paid  semiannually  on July 31 and  January 31.  Fox's fiscal  year is the  calendar year.  Required : a. Prepare  the journal  entry to  record the  bond  issuance  on  February  1, 2011. b. Prepare an 
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amortizatio n schedule  for the first  two years  of  issuance. c. Prepare  the  necessary  journal  entry on  December  31, 2011. d. Prepare  the  necessary  journal  entry on  January  31, 2012. Problem #6: General Journal Date Account Dr Cr Interest $8,000 x 2.48685 19,895 
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Unformatted text preview: principle $200,000 x 0.75131 = 150,262 present value at 10% $170,157 Equipment 170,000 Discount on notes payable 29,843 Notes Payable 200,000 General Journal Date Account Dr Cr Year 1 Interest Expense: Interest expense (10% x $170,157) 17,016 Discount on notes payable (difference) 9,016 Cash (4% x $200,000) 8,000 G eneral Journal Date Account Dr Cr Year 2 Interest Expense: Interest Expense (10% x [$170,157 + $9,016]) 17,917 Discount on notes payable (difference) 9,917 Cash (4% X $200,000) 8,000...
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This note was uploaded on 02/29/2012 for the course INTERMEDIA 301 taught by Professor ?? during the Spring '12 term at Post.

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Final 6 - principle $200,000 x 0.75131 = 150,262 present...

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