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  3. on the first day of its fiscal year, ebert company

On the first day of its fiscal year, Ebert Company issued $25,000,000 of 5 -year,...

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Accounting

imageimage On the first day of its fiscal year, Ebert Company issued $25,000,000 of 5 -year, 10% bonds to finance its operations. Interest is payable semiannually. The bonds were issued a a market (effective) interest rate of 11%, resulting in Ebert receiving cash of $24,057,788. The company uses the interest method. a. Journalize the entries to record the following: 1. Sale of the bonds. Round to the nearest dollar. If an amount box does not require an entry, leave it blank. Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Check My Work As the discount or premium is amortized, the carrying amount of the bond changes. As a result, interest expense also changes each period. b. Compute the amount of the bond interest expense for the first year. Round to the nearest dollar

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