Which bond price results in most interest expense for Adam

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Reference no: EM131820201

Question: Journalizing bond transactions Adam issued $40,000 of 1 0-year, 5% bonds payable on January 1, 2016. Adam pays interest each January 1 and July 1 and amortizes discount or premium by the straight line amortization method. The company can issue its bonds payable under various conditions. Requirements

1. Journalize Adam's issuance of the bonds and first semiannual interest payment assuming the bonds were issued at face value. Explanations are not required.

2. Journalize Adam's issuance of the bonds and first semiannual interest payment assuming the bonds were issued at 94. Explanations are not required.

3. Journalize Adam's issuance of the bonds and first semiannual interest payment assuming the bonds were issued at 105. Explanations are not required.

4. Which bond price results in the most interest expense for Adam? Explain in detail.

Reference no: EM131820201

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