Whitmore agency issued $500,000 of 5-year, 8% bonds at 97 onJanuary 1, 2015. The bonds salary interest double a year.
A. Prepare the journal entry to record the issuance of thebonds. Compute the total cost that borrowing for these bonds.
B. Repeat the demands from part (a), presume the bondswere issued in ~ 105.
|(b) (1)||Account Titles||Debit||Credit|
You are watching: Compute the total cost of borrowing for these bonds.
1) newspaper ENTRY :
|DAATE||ACCOUNTS & EXPLANATION||DEBIT||CREDIT|
|Jan 1||Cash A/c.........................Dr||485000|
|Discount on binding payable A/c.......Dr||15000|
|8% binding payable A/c||500000|
|(To record problem of binding payable)|
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