Bella Ltd issued $40,000,000 of bonds on June 1, 2020. The bond issue carries an...
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Accounting
Bella Ltd issued $40,000,000 of bonds on June 1, 2020. The bond issue carries an interest rate of 4.5% and matured June 1, 2025. Interest on the issue is paid on December 1 and June 1. When issued on June 1, market rates had moderated somewhat and the issue was priced to yield 5.0%. Bella has a December 31 year end. Required:
1. Prepare all journal entries required to record the bond for the first full calendar year the bonds are outstanding.
2. Show how all aspects of the bond will be reflected in the 2020 financial statements of Bella Ltd.
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