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Cutler Inc. issued $20 million of 8 year 10% callable bonds dated July 1,...

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Accounting

  1. Cutler Inc. issued $20 million of 8 year 10% callable bonds dated July 1, 2018. The bonds were issued at 95. The bonds are callable at 10 Burroughs uses straight-line amortization. Record the following transactions.
    1. Record the issuance on July 1.
    2. Record the first payment of interest on December 31.
    3. Record the second payment of interest on June 30.
    4. Was the effective interest rate greater than, less than, or equal to 10%?
    5. Record the bonds called on July 1, 2019.

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