On October 1, 2016, Ball Company issued 6% bonds dated October 1, 2016, with a face...

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Accounting

On October 1, 2016, Ball Company issued 6% bonds dated October1, 2016, with a face amount of $210,000. The bonds mature in 9years. Interest is paid semiannually on March 31 and September 30.The proceeds from the bond issuance were $218,888.62 to yield5.40%. Ball Company has a December 31 fiscal year-end and does notuse reversing entries.
Required:
1. Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the effective interest method.
2. Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the straight-line method.

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Please hit LIKE button if this helped For any further explanation please put your query in comment will get back to you Part 1 Date Account Debit Credit Oct 1 2016 Cash 21888862 Premium on Bond Payable 888862 Bond Payable 21000000 to record issuance of bond Dec 31 2016 Interest Expense 2188886256312 295500 Premium on Bond See Answer

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On October 1, 2016, Ball Company issued 6% bonds dated October 1, 2016, with a face...

80.2K

Verified Solution

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Accounting

Answer & Explanation Solved by verified expert

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1.	Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the effective interest method.
2.	Prepare journal entries torecord the issuance of the bonds and the interest payments for 2016and 2017 using the straight-line method.