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bond issue costs journal entries CPA-00513


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#1 coffeemug555

coffeemug555

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Posted 21 November 2014 - 07:09 AM

 

On December 1, 2006, Tigg Mortgage Co. gave Pod Corp. a $200,000, 12% loan. Pod received proceeds of $194,000 after the deduction of a $6,000 nonrefundable loan origination fee. Principal and interest are due in sixty monthly installments of $4,450, beginning January 1, 2007. The repayments yield an effective interest rate of 12% at a present value of $200,000 and 13.4% at a present value of $194,000. What amount of accrued interest receivable should Tigg include in its December 31, 2006 balance sheet?

  1. $4,450
  2. $2,166
  3. $2,000
  4. $0

 

 

What are the journal entries for the Tigg the lender?