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Prepare issuer journal entry to record initial bond issuance

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Question - On January 1, 2017, the board of directors of Papermaker Inc. issued 9-year, 2% bonds with a par value of $600,000 to finance equipment purchases.

1. Using the straight-line method to amortize bond discounts and premiums,

(a) Prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at par, and

(b) Calculate the total bond interest expense over the life of the bonds.

2. Using the straight-line method to amortize bond discounts and premiums,

(a) Prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at 97, and

(b) Calculate the total bond interest expense over the life of the bonds.

3. Using the straight-line method to amortize bond discounts and premiums,

(a) Prepare the issuer's journal entry to record the initial bond issuance and the first semiannual interest payment with the amortization of any bond discount or premium assuming the bonds were issued at 104, and

(b) Calculate the total bond interest expense over the life of the bonds.

Reference no: EM132733824

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