learning objective: issuing bonds payable; accruing interest; amortizing bonds by the effective method) Villa Drive-Ins...
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learning objective: issuing bonds payable; accruing interest; amortizing bonds by the effective method) Villa Drive-Ins Ltd issued a $520,000, 8%, 10-year bond payable on July 1 20X0, when the market rate was 10%. Also assume that Villa's accounting year ends on Dec 31. Journalize the following transactions for Villa Drive-Ins Ltd., including an explanationfor each entry: (a) issuance of the bond payable on July 1, 20X0. (b) Accrual of interest expense and amortization of bonds on Dec 31, 20X0. (Use the effective interest amortization method, and round amounts to the nearest dollar.) (c) Payment of the first semi-annual interest amount on Jan 1, 20X1.
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