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On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance 1/1/20x1 $ 40,701 12/31/20x1 $ 2,400 12/31/20x2 ? $ 2,239 ? $ 161 40,540 ? 40,370 12/31/20x3 ? ? 180 ? 12/31/20x4 ? 2,210 ? 40,000 3. How much cash was received on the day the bonds were issued (sold)? Cash received

On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance 1/1/20x1 $ 40,701 12/31/20x1 $ 2,400 12/31/20x2 ? $ 2,239 ? $ 161 40,540 ? 40,370 12/31/20x3 ? ? 180 ? 12/31/20x4 ? 2,210 ? 40,000 3. How much cash was received on the day the bonds were issued (sold)? Cash received

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 7EA: On Jan. 1, Year 1, Foxcroft Inc. issued 100 bonds with a face value of $1,000 for $104,000. The...
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On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance 1/1/20x1 $ 40,701 12/31/20x1 $ 2,400 12/31/20x2 ? $ 2,239 ? $ 161 40,540 ? 40,370 12/31/20x3 ? ? 180 ? 12/31/20x4 ? 2,210 ? 40,000 3. How much cash was received on the day the bonds were issued (sold)? Cash received
Transcribed Image Text:On January 1 of this year, Olive Corporation issued bonds. Interest is payable once a year on December 31. The bonds mature at the end of four years. Olive uses the effective-interest amortization method. The partially completed amortization schedule below pertains to the bonds: Date Cash Interest Amortization Balance 1/1/20x1 $ 40,701 12/31/20x1 $ 2,400 12/31/20x2 ? $ 2,239 ? $ 161 40,540 ? 40,370 12/31/20x3 ? ? 180 ? 12/31/20x4 ? 2,210 ? 40,000 3. How much cash was received on the day the bonds were issued (sold)? Cash received
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