On Jan. 1, 2020, Company sold $3,000,000 in long-term bonds. The bonds will mature in...
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Accounting
On Jan. 1, 2020, Company sold $3,000,000 in long-term bonds. The bonds will mature in 10 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest annually on Dec. 31 of each year. The bonds are to be accounted for under the effective-interest method.
1) Compute the issue price of the bond.
2) Journal entry at the time of bond issuance.
3) Adjusting journal entry for Dec. 31, 2020.
4) Adjusting journal entry for Dec. 31, 2021.
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