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Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
Edition 4ISBN: 978-0078025372 Exercise 31
(Supplement 10C) Recording Interest Accrual and Interest Payment (Simplified Approach to Effective-interest Amortization)
On January 1, 2012, Buchheit Enterprises reported $95,000 in a liability called "Bonds Payable, Net." This liability related to a $100,000 bond with a stated interest rate of 5 percent that was issued when the market interest rate was 6 percent. Assuming that interest is paid December 31 each year, prepare the journal entry to record interest paid on December 31, 2012, using the simplified effective-interest method shown in chapter supplement 10C.
On January 1, 2012, Buchheit Enterprises reported $95,000 in a liability called "Bonds Payable, Net." This liability related to a $100,000 bond with a stated interest rate of 5 percent that was issued when the market interest rate was 6 percent. Assuming that interest is paid December 31 each year, prepare the journal entry to record interest paid on December 31, 2012, using the simplified effective-interest method shown in chapter supplement 10C.
Explanation
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Under the Simplified effective-interest ...
Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby
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