On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds. The market rate was 5%, and Kaye purchased the bonds for $233,681. The bonds pay interest semi-annually, on June 30 and December 31. Kaye uses the amortized cost model and the effective-interest method to recognize interest income on bond investments. Rounding values to the nearest dollar (if necessary), the entry to recognize receipt of the December 31, 2021 interest paym
On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds. The market rate was 5%, and Kaye purchased the bonds for $233,681. The bonds pay interest semi-annually, on June 30 and December 31. Kaye uses the amortized cost model and the effective-interest method to recognize interest income on bond investments. Rounding values to the nearest dollar (if necessary), the entry to recognize receipt of the December 31, 2021 interest paym
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PB: Edward Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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On January 1, 2021, Kaye Ltd. purchased $250,000 of Danford Co.'s 4%, 8-year bonds. The market rate was 5%, and Kaye purchased the bonds for $233,681. The bonds pay interest semi-annually, on June 30 and December 31. Kaye uses the amortized cost model and the effective-interest method to recognize interest income on bond investments. Rounding values to the nearest dollar (if necessary), the entry to recognize receipt of the December 31, 2021 interest payment will include:
Question 1 options:
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DR Cash $5,863 |
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DR Cash $5,842 |
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CR Interest income $5,842 |
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CR Interest income $5,863 |
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