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(Please show work) Woodward Corporation issued $100,000​, 10​%, five​-year bonds on January​ 1, 2019​, for $108,110...

(Please show work)

Woodward Corporation issued $100,000​, 10​%, five​-year bonds on January​ 1, 2019​, for $108,110 when the market interest rate was 8​%. Interest is paid semiannually on January 1 and July 1. The corporation uses the ​effective-interest method to amortize bond discounts and premiums. The total amount of bond interest expense recognized on July​ 1, 2019​, would be closest to

answer: $4,324

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Answer #1

Working showing for the answer $ 4,324 of bond interest expense to be recognized as on July 1st, 2019 ( Amounts in $'s)Interest payment Interest expenses Amortization Credit balance in bond premium a/c Cr bal in bonds payable a/c Book value of

Working:-

Semi annual interest on bond face value $ 1,00,000 = 1,00,000 X 10% X 6/12 = $ 5000

Semi annual interest on band market value $ 1,08,110 = 1,08,110 X 8% X 6/12 = $ 4,324

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