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Round Corporation was authorized to issue $300,000 of bonds. On January 1, 2015, the corporation issued $150,000 of bonds for $147,000. Details of the bond indenture are as follows:
Required:
- Calculate
- The amount of interest paid every interest payment date
- The amount of amortization to be recorded at each interest payment date (use the straight-line method of amortization).
- Calculate actual interest expense for each six-month period.
- Prepare the journal entries to record the interest and amortization at June 30, 2015.
- Prepare a partial balance sheet showing the bond liability and discount on December 31, 2015 and 2016 assuming the bonds will be redeemed on December 31, 2017.
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