ABC Company sold $1,000,000 of 5% bonds with interest due semi-annually at a market rate of...

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Accounting

ABC Company sold $1,000,000 of 5% bonds with interest duesemi-annually at a market rate of 6%. They are 5 year bonds. Thissale occurred January 1, 2019.
a. Provide an amortization schedule using the effectiveinterest rate method for the entire life of the bond.
b. Show the journal entry for the January sale.
c. Show the journal entry for the first interest paymentdate.

NOTE: A good search term for finding examples is "effectiveinterest rate method example" and "bond issuance price"

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Calculation for PV of Bonds Face Value 1000000 Annual Coupon rate 5 Market Rate 6 Years to Maturity 5 Payment Frequency 2 Value of Bond 957349 Ans1 Amortisation table for bonds using the effective See Answer

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