Horizontal model to record payment of semiannual interest

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Reference no: EM131292223

On January 1, 2016, Drennen, Inc., issued $3.1 million face amount of 11-year, 10% stated rate bonds when market interest rates were 8%. The bonds pay semiannual interest each June 30 and December 31 and mature on December 31, 2025.

Assume instead that the proceeds were $3,052,000. Use the horizontal model to record the payment of semiannual interest and the related discount amortization on June 30, 2016, assuming that the discount of $48,000 is amortized on a straight-line basis. (Use amounts with + for increases and amounts with – for decreases.)

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Reference no: EM131292223

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