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Praham corp has a December 31 st year end and issued a bond with the following characteristics. Face amount $500,000. Date of bond feb 1 st 2015...
Praham corp has a December 31st year end and issued a bond with the following characteristics.
1. Face amount $500,000.
2. Date of bond feb 1st 2015 maturity January 31st 2019
3. Interest payment July 31st and jan 31st each year
4. Stated rate is 10% and effective rate is 8%
5. Bonds were issued Feb 1st 2015.
Required
a. Provide the entries to record the issuance of the bond on Feb 1st 2015
b. Prepare the bond amortization schedule.
c. Prepare the entries to record the interest payment on July 31st 2004 and the accrual of interest on december 31st 2015.
d. Prepare the entries to record the interest payment on jan 31st 2017
e. What is the book value of the bond on December 31st and November 30th 2018.
