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Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds: Date...

Net Work Corporation, whose annual accounting period ends on December 31, issued the following bonds:

Date of bonds: January 1, 2018
Maturity amount and date: $360,000 due in 10 years (December 31, 2027)
Interest: 12.5 percent per year payable each December 31
Date issued: January 1, 2018
January 1, 2018—Financial Statements: Case A (issued at 100) Case B (at 96) Case C (at 104)
a. Bonds payable
b. Unamortized premium (discount)
c. Carrying value
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Answer #1
January 1, 2018—Financial Statements: Case A (issued at 100) Case B (at 96) Case C (at 104)
a. Bonds payable $      3,60,000 $        3,60,000 $        3,60,000
b. Unamortized premium (discount) $                  -   $          -14,400 $           14,400
c. Carrying value $      3,60,000 $        3,45,600 $        3,74,400


Discount = $360000 / $100 x $4 = $14400

Premium = $360000 / $100 x $4 = $14400

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