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paulson company issues 7%, four-year bonds, on january 1 of this year, with a par value of $104,000 and semiannual interest payments. semiannual period-end unamortized discount carrying value (0) january 1, issuance $ 6,813 $ 97,187 (1) june 30, first payment 5,961 98,039 (2) december 31, second payment 5,109 98,891 use the above straight-line bond amortization table and prepare journal entries for the following. (a) the issuance of bonds on january 1. (b) the first interest payment on june 30. (c) the second interest payment on december 31.

Answer :

(0) January 1,  issuance            $13,466               $ 186,534

(1) June 30, first payment          11,782                188,218

(2) December 31, second payment 10,098             189,902

In finance, a bond is a type of protection below which the issuer (debtor) owes the holder (creditor) a debt, and is obliged – depending at the phrases – to pay off the essential (i.e. quantity borrowed) of the bond on the maturity date as well as hobby (called the coupon) over a special quantity of time. The hobby is generally payable at constant durations: semiannual, annual, and less often at different periods. as a consequence, a bond is a form of loan or IOU. Bonds offer the borrower with outside price range to finance long-time period investments or, within the case of government bonds, to finance contemporary expenditure.

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