On January 1, 2009, Clintwood Corporation issued a $1,000, ten-year, 10% bond payable (interest payable each December 31). For the three assumptions below, provide the following information assuming the accounting year ends December 31, and straight-line amortization is used:
Assumption A - Bonds issued at 100
Assumption B - Bonds issued at 96
Assumption C - Bonds issued at 104
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@100
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@96
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@104
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Cash Received at Issuance
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Interest Expense for 2009
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Net bond carrying value on December 31, 2010
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On January 1, 2009, Schultz Corporation issued $100,000 of its ten-year, 6% bonds payable at $98,000. The bonds were dated January 1, 2009, and interest is paid each December 31. A. Give the entry for the sale of the bonds. B. Give the entry to record the first interest payment. Assume straight-line amortization.