Reference no: EM132791523
Question - Winter Corp. issued 10-year bonds with a par value of $707093, on December 31, 2020.
The coupon rate is 8%. The bonds will yield 6% on an annual basis. Interest is paid semi-annually on June 30 and December 31. Winter Corp. uses the effective interest method to amortize premiums or discounts. The bond quote was: 114.87747
All amounts are rounded to the nearest dollar (no decimals required). The fiscal year end is December 31.
Required -
1. Calculate the selling price of the bond issuance.
2. Prepare the bond amortization table for the first three periods.
3. Prepare the journal entries for:
a. The bond issuance (December 31, 2020).
b. The first interest payment (June 30, 2021).
c. The second interest payment (December 31, 2021).
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